IDEAS home Printed from https://ideas.repec.org/a/wly/intssr/v65y2012i3p1-25.html
   My bibliography  Save this article

The retrenchment of second‐tier pensions in Hungary and Poland: A precautionary tale

Author

Listed:
  • Elaine Fultz

Abstract

In 1997, Hungary and Poland led Central Europe in partially privatizing their national pension systems, diverting a portion of public pension contributions to privately‐managed individual investment accounts. In the aftermath of the global economic crisis, both governments retrenched these second‐tier schemes: Hungary (December 2010), by ceasing to fund the accounts and recouping most workers' existing balances; and Poland (April 2011), by reducing the diversion of contributions to the second tier. The factors that drove these retrenchments are traced to the original 1997 second‐tier designs, which omitted key specifications related to financing the accounts, private benefit design, and the regulation of private management fees. While both governments tried to compensate for the missing design specifications during implementation, the results were limited. By reducing investment returns and raising borrowing costs, the global economic crisis brought the problems to a head. The conclusion highlights some outstanding issues whose resolution will shape the retrenchments' long‐term impacts.

Suggested Citation

  • Elaine Fultz, 2012. "The retrenchment of second‐tier pensions in Hungary and Poland: A precautionary tale," International Social Security Review, John Wiley & Sons, vol. 65(3), pages 1-25, July.
  • Handle: RePEc:wly:intssr:v:65:y:2012:i:3:p:1-25
    DOI: 10.1111/j.1468-246X.2012.01434.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1468-246X.2012.01434.x
    Download Restriction: no

    File URL: https://libkey.io/10.1111/j.1468-246X.2012.01434.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Piotr Bartkiewicz, 2021. "The evolution of the Polish government bond market," Public Sector Economics, Institute of Public Finance, vol. 45(1), pages 149-169.
    2. Prabashini IGN, 2020. "A Sociological Study on the Problems Faced by the Pensioners in Sri Lankan Context," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 4(9), pages 01-07, September.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:intssr:v:65:y:2012:i:3:p:1-25. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://doi.org/10.1111/(ISSN)1865-1674 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.