Pension contributions and acquired pension rights 1997-2006
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This paper provides hitherto largely unknown information, collected from administrative databases, analysed, arranged, and interpreted by introducing a number of new concepts and terms. Six million contributors have been counted over ten years, as opposed to the annual average of 4.2 million in Hungary, as 38 per cent of all contributors have already left or just entered the labour market within the period examined, mainly due to demographic factors. The remaining constant contributors exhibited differentiated and mostly variable, fragmented contributing (working) careers. Variability, however, has been strongly polarized: 55 per cent of individual, annual changes have remained within the almost permanent range of employment and 25 per cent within the marginal range. The employers' contribution base has been only 80-85 per cent of gross average earnings as published by the Central Statistical Office. Time-proportional eligibility for old-age pension according to present rules - five accrual years in ten, the equivalent of 20 years over 40 years - has been acquired by 67 per cent of individuals. The remaining 33 per cent would be eligible for extremely low pensions even if the 20-year accrual threshold had been lifted. The paper concludes with a few observations on the integrated use of administrative databases, the desirability of further research, and the dilemma to be faced in prospective pension reform.
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