What has been Wrong with the Retirement Rules in Hungary?

Tibor Czeglédi (), Andras Simonovits (), Endre Szabó () and Melinda Tir ()
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Tibor Czeglédi: Data Bank, Research Center for Economics and Regional Sciences, Hungarian Academy of Sciences
Endre Szabó: Data Bank, Research Center for Economics and Regional Sciences, Hungarian Academy of Sciences
Melinda Tir: Data Bank, Research Center for Economics and Regional Sciences, Hungarian Academy of Sciences

Acta Oeconomica, 2017, vol. 67, issue 3, 359-387

Abstract: A basic problem with the ever-changing Hungarian retirement rules has been that they created excessive shares of gainers and of losers. Certain workers with long (and continuous) employment could retire well below the normal retirement age (NRA) with full benefit. Other workers, with fragmented and therefore short employment had to work until reaching the ever rising NRA. A peculiar consequence of these rules is the strong negative correlation between the retirement age and the length of contribution. Moving in the direction of a fair system, like the Nonfinancial Defined Contribution system, would improve sustainability and fairness.

Keywords: normal retirement age; early retirement; years of contributions; rights; flexible (variable) retirement (search for similar items in EconPapers)
JEL-codes: H55 I14 J26 (search for similar items in EconPapers)
Date: 2017
Note: We express our debt to the experts of the Central Administration of National Pension Insurance who created a very detailed dataset for the public; and to Nick Barr, Rudolf Borlói, Róbert Iván Gál, Gábor Kézdi, Ádám Reiff and the three anonymous referees for their valuable comments. András Simonovits’ research was supported by the Hungarian Research Fund (OTKA), Grant no. 108668.
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