Hungary’s larger opposition parties call for pension reform

Hungary’s larger opposition parties agreed at a forum on Thursday on the need to reform Hungary’s pension system.

Hungary currently operates a mandatory, defined-benefit pay-as-you-go pension system with a retirement age set at 63. A public minimum pension, set at a monthly 28,500 forints (EUR 93), is combined with an earnings-related pension. In late 2010, the government suspended the mandatory private pension scheme and all contributions were redirected to the public pension scheme.

Socialists (MSZP)

Speaking at a forum of opposition leaders organised by the National Association of Pensioners, Socialist leader Gyula Molnár called for the minimum pension to be more than doubled. Retirement benefits worth less than 100,000 forints (EUR 327) should be raised proportionally more than average hikes to other benefits, he added.

He said that the government tended to support richer pensioners. A more secure and sustainable system is needed and pensioner rights should be enshrined in the constitution, he added.

The 13th month pension, or a similar kind of payment, should be restored, Molnár said. From the age of 62 onwards, retirement should be made more flexible and the system for disability pensions reviewed, he said.

Jobbik

Gábor Vona, the leader of the patriotic Jobbik party, called for pension payments to be raised and their distribution made fairer. Further, the medicine subsidy system should be strengthened and VAT on goods generally bought by older people reduced, he said.

The issue of pensioners should be “freed from party politics” since changes should last beyond political cycles, Vona said. He called for the Council of Pensioners to be restored, and, rather than operating a social contribution tax, social contributions should be restored.

The Jobbik leader said it would help efforts to recalibrate the system were more people to work for higher wages, since more contributions would flow into the system. Whereas on average 12 percent of GDP goes towards pensions in the EU as a whole, in Hungary this proportion is just 9 percent, he said.

As we wrote before, Vona has challenged Prime Minister Viktor Orbán for a debate on the situation of pensioners in Hungary.

Democratic Coalition (DK)

Leftist Democratic Coalition (DK) leader Ferenc Gyurcsány said the pension system needed short-term corrections and long-term reforms, since the “great drama is expected in the long term”.