The Hungarian Pension Reform: A Preliminary Assessment of the First Years of Implementation

Abstract

This paper reviews the main components and objectives of the Hungarian pension reform, and makes a preliminary assessment of the first years of its implementation. The paper is structured as follows. The second section provides some background material, examining briefly the performance of the pension system before the reform, and showing long-run projections of the system in the absence of reform. The third section describes the overall reform package, examines the switching results, and provides a number of long-run actuarial simulations of the new multi-pillar system. The fourth section examines the structure and performance of the private pillars in the early stages of im plementation. Finally, the fifth section provides some conclusions and identifies possible lessons for other countries