A national strategic report published on the website of the Ministry of Social and Labor Affairs said that Hungary's current pension system must be reformed or else an increasing number of Hungarians could be left without pensions.
The amount of new old-age pensions could fall compared to average wages and the average number of working years could decline significantly.
The ministry's report projects that that, without a change in the system, the current ratio of 76 pensioners to 100 active workers will increase to 85 pensioners to 100 active workers by 2030 and to 103 pensioners to 100 active workers by 2050.
With no change in the system, the deficit of the national social security system, excluding the temporary costs of the transfer to private pension funds, would stay around 1pc of the GDP until 2030, but would increase then after and reach 3%-3.5% of GDP by 2050, according to the report.
In an additional risk, the proportion of those who will not have fulfilled the minimum working period to be eligible for a pension or will receive only a minimum pension could also increase, considering unemployment and employment in the black or grey economy, the ministry report warned.
According to some estimates, about 500,000 people could have retired without a pension by 2030, which would place a huge burden on the social system and lower the average standard of living of the elderly. The average number of years worked could fall to 33 years by 2030 compared to the current 37-38 years; consequently, the value of pensions will be reduced by 7%-10%-points in relation to average earnings, according to the report.
The ministry report notes that the government asked the Pension and Old-age Round Table (NyIKA) to prepare reform proposals for the pension system by the end of the year. (MTI – Econews)