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Parliament passes pension law

New legislation restricting early retirement was passed by Parliament yesterday in a bid to encourage employees in their late 50s to remain in the workforce until the legal retirement age of 62.

In line with the new law, early retirement will remain an option for those past the age of 59 with a minimum of 40 years of employment until 2012. From 2013, the age limit will be raised to 60 and the service time requirement will be 41 years. Early retirement will be also discouraged in the coming years by a widening gap between state retirement benefits paid to early retirees and pensioners who retired at age 62, with a 10% difference at the end of the decade.

Starting from March 2007, pensioners who continue to work will lose exemption from the 8.5% employment tax. As another disincentive to staying employed after early retirement, Parliament has come to the decision that early retirees are not to receive state pension until they reach the age of 62 as long as their monthly salary is higher than the minimum wage. (Magyar Hírlap, Napi Gazdaság, Népszava)