Abstract
The history of the Hungarian public pension system started in 1912 with a budget-financed scheme for civil servants. It continued with a more general scheme (Act XL of 1928) for employees and workers in trade and industry, but not in agriculture. This system was funded and operated with a governing board until 1950.2 It had hardly started to pay benefits before it was transformed into a pay-as-you-go (PAYG), state-managed system soon after the war. The coverage of those in the `active age groups’ was under one third in 1940. It increased steadily from 1950 onwards. Pensions only reached relatively acceptable levels, however, from the mid-seventies onwards. The replacement rate increased from 22% in 1950 to 56% in 1985, reaching a peak of 66% in 1990. Since then it has slowly been declining again (being 61% in 1995).
Article Footnote
Paper originally prepared for the Fifth Central European Forum organised by the Institute of Human Studies Vienna, October 24-25th, 1997. I have to thank Mária Augusztinovics, István Bánfalvi, Gyula Zombori and Michael Hill for background information and helpful comments.
The Hungarian pension scheme was directed by a self-governing body, a representative board, ‘Önkormányzat’ in Hungarian, also before the war. This governing body - called hereafter Pension Board - assured the relative independence of the Fund.
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Ferge, Z. (1999). The Politics of the Hungarian Pension Reform. In: Müller, K., Ryll, A., Wagener, HJ. (eds) Transformation of Social Security: Pensions in Central-Eastern Europe. Contributions to Economics. Physica, Heidelberg. https://doi.org/10.1007/978-3-642-58654-5_13
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DOI: https://doi.org/10.1007/978-3-642-58654-5_13
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