We don’t have much time: that’s when the Hungarian pension system could collapse

The Hungarian pension system is in danger, the main reason being that society is getting older. András Farkas, the founder of NyugdíjGuru News, spoke to RTL about the problems of the old-age pension, which viewed by Portfolio.

The pension system will soon collapse

The traditional division is that Hungarian people will have their pensions from the contributions of active workers. However, according to the expert, this will become more and more difficult to sustain. The country’s demographic structure is changing, society is essentially aging, which should be prepared for and the financing structure adjusted accordingly.

The expert pointed out that we don’t have much time, because In 2038, the first Ratkó grandchildren will join the ranks of pensioners, that is, those born in 1973. After that, many people were born every year until 1977, and if they retire, then the current annual number of 90-100 thousand new pensioners will rise to 160-170 thousand.

All of this is a huge jump that will put extreme pressure on the pension system, so it will be difficult to generate the necessary coverage to pay the pensions.

Added to this is the fact that fewer and fewer young people enter the labor market, i.e the number of contributors also decreases. All this is compounded when Hungarian workers take up work abroad, so their payments do not appear in the state coffers.

Possible solutions

According to András Farkas, it is one of the possible solutions the introduction of the employment pension pillarwhich is already used by more and more EU member states, most recently Poland decided in favor of it. The development of this pillar could be encouraged by the state with a tax discount. By the end of June this year, the government has undertaken to come up with a study based on the knowledge of international experts about the pension reformbut this has not happened since then.

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