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Competition and performance in the Hungarian second pillar

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  • Impavido, Gregorio
  • Rocha, Roberto

Abstract

The performance of the Hungarian second pillar since inception has been mixed. This is partly due to a less than satisfactory support for the 1997 pension reform, conservative fund portfolio distributions, the hybrid nature of the mandatory pension fund system, the segmented nature of the market in terms of costs, and a less than aggressive commitment on the part of the Hungarian Financial Supervisory Authority to a low-cost, transparent, and competitive equilibrium. In the accumulation phase, the authorities would need to further promote transparency and comparability of information on costs and investment performance, facilitate migration to lower cost funds, and more generally promote competition. The regulatory framework of the payout phase needs to be overhauled before the first cohort of workers retires.

Suggested Citation

  • Impavido, Gregorio & Rocha, Roberto, 2006. "Competition and performance in the Hungarian second pillar," Policy Research Working Paper Series 3876, The World Bank.
  • Handle: RePEc:wbk:wbrwps:3876
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    References listed on IDEAS

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    1. Dobronogov, Anton & Murthi, Mamta, 2005. "Administrative fees and costs of mandatory private pensions in transition economies," Journal of Pension Economics and Finance, Cambridge University Press, vol. 4(01), pages 31-55, March.
    2. Feldstein, Martin & Liebman, Jeffrey B., 2002. "Social security," Handbook of Public Economics,in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 4, chapter 32, pages 2245-2324 Elsevier.
    3. Peter A. Diamond, 2000. "Administrative Costs and Equilibrium Charges with Individual Accounts," NBER Chapters,in: Administrative Aspects of Investment-Based Social Security Reform, pages 137-172 National Bureau of Economic Research, Inc.
    4. Peter Diamond, 2004. "Social Security," American Economic Review, American Economic Association, vol. 94(1), pages 1-24, March.
    5. Matits, Agnes, 2004. "Supplementary Pension Funds in Hungary," Discussion Paper 208, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.
    6. Palacios, Robert & Rocha, Roberto, 1998. "The Hungarian pension system in transition," Social Protection and Labor Policy and Technical Notes 20048, The World Bank.
    7. Haukur Benediktsson & Tryggvi Thor Herbertsson & J. Michael Orszag, 2001. "The charge ratio on individual accounts and investment plans in Iceland," Applied Economics, Taylor & Francis Journals, vol. 33(8), pages 979-987.
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    11. Bateman, Hazel & Mitchell, Olivia S., 2004. "New evidence on pension plan design and administrative expenses: the Australian experience," Journal of Pension Economics and Finance, Cambridge University Press, vol. 3(01), pages 63-76, March.
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    Citations

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    Cited by:

    1. Gregorio Impavido, 2008. "Efficiency and Performance of Bulgarian Private Pensions," IMF Working Papers 08/268, International Monetary Fund.
    2. Helene Poirson Ward, 2007. "Financial Market Implications of India’s Pension Reform," IMF Working Papers 07/85, International Monetary Fund.
    3. Heinz Rudolph & Hela Cheikhrouhou & Roberto Rocha & Craig Thorburn, 2007. "Financial Sector Dimensions of the Colombian Pension System," World Bank Publications, The World Bank, number 6785, April.
    4. Andras Simonovits, 2009. "Hungarian Pension System and its Reform," IEHAS Discussion Papers 0908, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.

    More about this item

    Keywords

    Investment and Investment Climate; Economic Theory&Research; Economic Stabilization; Financial Intermediation; Settlement of Investment Disputes;

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