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Parliament approves government’s proposed pension revisions

  Hungary’s parliament on Monday separately approved the Bajnai government’s proposed pension revisions, including elimination of the extra month’s bonus payment, modification of the pension index used to calculate increases in payments and a rise in the retirement age.

Parliament will vote next Monday on the Bajnai government’s pension-revision package as a whole.

The pension revisions approved on Monday include a provision replacing the current pension bonus equivalent to one month’s payment with a pension premium, whose amount will equal the sum of the current HUF 80,000 bonus only if Hungary’s GDP rises by an annual rate of at least 7.5%.

The government will initially pay the pension premium to a maximum sum of HUF 20,000 only when Hungary’s annual GDP growth surpasses an annual rate of 3.5%.

Another of the measures approved on Monday stipulates that the sum of pension payments will rise commensurately with increases in consumer prices as long as Hungary’s GDP growth remains below an annual rate of 3%, while pension payments will rise at a proportion of four to one commensurate with inflation and net wages, respectively, if GDP growth rises to an annual rate of between 3% and 4%, at a proportion of three to two, respectively, if GDP growth increases to an annual rate of between 4% and 5%, returning to a proportion of one to one commensurate with inflation and net wages if GDP growth rises above an annual rate of 5%.

Finally, the measures approved on Monday call for Hungary’s retirement age to be increased from the current 62 years beginning in 2012, increased by a six months per year to 65 years, while men of at least 60 years old and women of at least 59 years old be eligible for early retirement. (MTI-Econews)