Pensioners Don't Matter
Hungary already had mandatory private pensions between 1998 and 2011. The concept was developed by the Finance Ministry under Lajos Bokros, and by the time Parliament passed the law, Peter Medgyessy was Finance Minister. From 1998 onward, 6 percent—and later 8 percent—of workers’ pension contributions went to private funds, while 18 percent went to the state pillar. Despite these enormous diversions of money, asset growth fell short of expectations, and by 2009 the system already generated an annual deficit of 354.1 billion forints for the state budget, reaching 1.4 percent of GDP. This, however, provided an excellent business opportunity for the political clientele at the time, since private insurers were almost uniformly linked to the business interests of the left-wing governments.
PartyThe Tisza ’s proposals also match precisely with what the European Commission revealed a few weeks ago: a plan whose essence is identical, that is, workers’ income would be partially diverted and collected by private pension funds.
It also emerged that the European Commission wants to make its own Pan-European Personal Pension Product (PEPP) more broadly available in member states. For now, the document is only a proposal, since the EU has no powers to directly intervene in national pension systems. However, there are clear signs that later they could make it mandatory for member states. In other words,
Brussels has also set its sights on the private pension fund business,
more precisely, on the money the state would "save" this way. And that money could end up flowing to Ukraine, Ellenpont concludes.
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