Hungary's pension reform must make a transparent connection between pension contributions and pension payments, but the reforms must not be allowed to hurt the country's current pensioners, government commissioner in charge of state reform Tibor Draskovics told a conference on Tuesday.
Draskovics said the retirement age should be raised, and laws should be amended to encourage higher legal employment.
National Bank of Hungary (MNB) managing director István Hamecz said Hungary's pension reforms started in 1997 and 1998 had failed. The country's pension system is among the weakest and most expensive in the world, he said. The average annual real yield of contributions into private pension funds, one of the products of these reforms, was just 2.9% between 1998 and 2005. The poor performance raises the risk that the state will have to supplement future pensions to provide an acceptable living to pensioners, Hamecz said