POPULATION AGING AND STRENGHTENED PROGRESSIVITY OF PENSIONS: THE CASE OF HUNGARY

09/04/2025

by András Simonovits

András Simonovits’s paper recently put to our website argues that without strengthening progressivity of pensions, to sustain the Hungarian public pension system is hopeless. It is obvious that in addition to raising the contribution rate and the statutory retirement age in the long-run, the benefit ratio (i.e., the ratio of average pensions to average wages) must be reduced. We model the process of strengthening the progressivity of initial pensions (i.e., decreasing the ratio of high benefits to high earnings) while preserving the real value of the pensions in payment, offering various scenarios