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A rational pension reform package: Hungary, 2025

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  • András Simonovits

    (Centre for Economic and Regional Studies)

Abstract

As part of the Recovery and Resilience Plan (RRP, 2023), the Hungarian government pledged to reform the pension system. The main themes are sustainability and adequacy. The pension plan is to be discussed publicly and put into law by March 2025. The last detailed official pension study was the 2016-discussion paper of the Hungarian National Bank which should be updated. The present study is a private work which may contribute to the improvement of the current pension system. The current and the projected states of the Hungarian pension system are outlined, and then simple and complex reforms are formulated. Naming just two reform steps, I start with the simplest step: the return to public discussion steered by a revitalized Fiscal Council and end with the most complex: the introduction of the flexible (variable) retirement age.

Suggested Citation

  • András Simonovits, 2023. "A rational pension reform package: Hungary, 2025," CERS-IE WORKING PAPERS 2324, Institute of Economics, Centre for Economic and Regional Studies.
    • Handle: RePEc:has:discpr:2324
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    References listed on IDEAS

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    5. Zoltán Ádám & András Simonovits, 2019. "From Democratic to Authoritarian Populism: Comparing Pre- and Post-2010 Hungarian Pension Policies," Acta Oeconomica, Akadémiai Kiadó, Hungary, vol. 69(3), pages 333-355, September.
    6. András Simonovits, 2021. "Introducing flexible retirement : a dynamic model," CERS-IE WORKING PAPERS 2109, Institute of Economics, Centre for Economic and Regional Studies.
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    9. Martin S. Feldstein & Jeffrey B. Liebman, 2002. "Introduction to "The Distributional Aspects of Social Security and Social Security Reform"," NBER Chapters, in: The Distributional Aspects of Social Security and Social Security Reform, pages 1-10, National Bureau of Economic Research, Inc.
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    11. Elaine Fultz & Kenichi Hirose, 2019. "Second‐pillar pensions in Central and Eastern Europe: Payment constraints and exit options," International Social Security Review, John Wiley & Sons, vol. 72(2), pages 3-22, April.
    12. András Simonovits, 2011. "The mandatory private pension pillar in Hungary: An obituary," International Social Security Review, John Wiley & Sons, vol. 64(3), pages 81-98, July.
    13. Barr, Nicholas & Diamond, Peter, 2008. "Reforming Pensions: Principles and Policy Choices," OUP Catalogue, Oxford University Press, number 9780195311303.
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    15. András Simonovits, 2021. "Introducing Flexible Retirement: A Dynamic Model," Prague Economic Papers, Prague University of Economics and Business, vol. 2021(6), pages 635-653.
    16. Erik Granseth & Wolfgang Keck & Wolfgang Nagl & András Simonovits & Melinda Tir, 2019. "Negative correlation between retirement age and length of contribution?," Oxford Economic Papers, Oxford University Press, vol. 71(4), pages 1050-1070.
    17. András Simonovits, 2020. "Indexing Public Pensions in Progress to Wages or Prices," Central European Journal of Economic Modelling and Econometrics, Central European Journal of Economic Modelling and Econometrics, vol. 12(2), pages 171-194, June.
    18. Andras Simonovits, 2011. "The Mandatory Private Pension Pillar in Hungary: An Obituary," CERS-IE WORKING PAPERS 1112, Institute of Economics, Centre for Economic and Regional Studies.
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    Cited by:

    1. Gábor Oblath & András Simonovits, 2024. "Statistical overstatement of average wages and its impact on pensions: the case of Hungary," CERS-IE WORKING PAPERS 2402, Institute of Economics, Centre for Economic and Regional Studies.
    2. Simonovits, András, 2024. "A népességöregedés kihívásai és újraelosztás a nyugdíjrendszerben [Population aging and redistribution in a pension system]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(7), pages 833-849.
    3. Simonovits, András, 2024. "Egy középtávú magyar nyugdíjreform költségbecslése [The cost estimation of a middle-term Hungarian pension reform]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(12), pages 1325-1350.

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    More about this item

    Keywords

    Keywords: pension systems; pension policies; pension reforms; Hungary;
    All these keywords.

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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