Hungarian Politics

[Tamas]

I will be going to Budapest in about two weeks.. will I be: safe?

Sure. I dont expect riots to begin for several years at least

[DGuller]

I will be going to Budapest in about two weeks.. will I be: safe?

Sure. I dont expect riots to begin for several years at least

What about summary executions?

[Syt]

and favourize the historical religions

Like Islam?

[Valmy]

Like Islam?

History starts in 1699.

[Tamas]

After all this it should come as no surprise that the state news agency has been pulled under tight control by the governing forces, several months ago.

They did sink to a new low just recently, however.

The major voice of criticism toward Orban and his medieval laws in the EU has been Daniel Cohn-Bendit, the green leftie guy.

Apparently, a decade ago they tried to finish him off with accusations of pedophilia due to his book written in 1975.

To "counter"  his current criticism, this accusation has been brought back by government circles. Well, and of course, "Cohn" is as jew-sounding as you can get around here, so its not like he is not an easy target for populist dismissal.

So, this guy was on a press conference last Friday. If you watched the state TV's news about that, you could see that their reporter asked him about the pedophile charges, then Cohn Bendit immediately rushed out of the conference.

However, if you watch the full footage of the conference, you can see that he did answer the question (condemning the practice of digging this decade-old shit out to discredit him), and then HALF AN HOUR LATER, he ends the press conference to reac his plane, not giving time for the Hungarian state-TV reporter to ask him about the media law - condemning EP decision.

Not only censorship, but manipulating the video feed. Damn.

BTW, apparently (I did not hear it), the initial news about this Cohn fellow was so offensive in the state radio (about a month ago) that they had it read out by a trainee, because none of the regulars agreed to read it. About the same time, a long time news anchor left the state TV, my guess is that the two are related.

[Duque de Bragança]

and favourize the historical religions

Like Islam?

Islam is history indeed

[Tamas]

There are two kinds of payments into the pension system in Hungary.

10% goes off your nominal wage. And your employer also pays 24% of your nominal wage (but not deducting this from it - in practice, little difference it makes of course. It still counts to the money you cost to your employer, yet you never see a dime from it).
Before this year, the 10% went to your private fund, the 24% went to the state fund, and you would have received pension from both.


At the very start of this year, the little more the active workforce of 3 million people, including me, faced the government's threat: you either go back to the state pension entirely, or if you stay private, you would still have your employer pay the 24%, but you would not receive the right for a state pension payment for it.

Only a hundred thousand of us called the obvious bluff and stayed. It was obvious because the present pension system has been an enormous strain on the state, on the long run it was bound to change.

Altough not yet voted on, the plan for this change has been leaked:
Instead of sinking your 10%+24% into the black void of the gross pension budget, everyone will get an individual account (you already had that on your private fund account, obviously). But, only the payments of the 10% will be registered there. The 24% will go to financing of the existing pensions, or whatever the rap is.
And your pension will be determined by the amount of money on this account, and your age and stuff.

In other words, it will be EXACTLY the setup they threatened us with, EXCEPT that there is no talk of interest, like you had with your private fund account (and it was pretty sweet, too).


What can I say to the 3 million poor bastards who were bullied into folding their hand? 

[Habbaku]

I believe that if our government ever tried to touch my savings/retirement plan via any other method than inflation, I would resort to not-quite-legal activities.

I am amazed and disappointed that Hungary isn't up in arms about this stuff.  Then I remember they voted for this.

What's Fidesz's approval?  80%?

[Tamas]

Less than 50% nowadays.

And sadly the public's take on private property is a bit odd even by European standards. 

But the general sentiment regarding the pension nationalization scheme was "I don't want this, but they will take away 2/3rd of my pension payment if I don't do it". And of course they will end up with the 2/3rd taken regardless.

[Admiral Yi]

Is there some transition date in the future, when your payout wll be determined solely by your 10% contribution?

I ask because there are presumably current retirees who are getting more; otherwise there would be nothing for the 24% to finance.

[Tamas]

Is there some transition date in the future, when your payout wll be determined solely by your 10% contribution?

I ask because there are presumably current retirees who are getting more; otherwise there would be nothing for the 24% to finance.

Well, I am not sure where they will draw the transition line, but there will be plenty to finance from that 24%: the people already on various forms of pensions. That's quite a lot.

[alfred russel]

There are two kinds of payments into the pension system in Hungary.

10% goes off your nominal wage. And your employer also pays 24% of your nominal wage (but not deducting this from it - in practice, little difference it makes of course. It still counts to the money you cost to your employer, yet you never see a dime from it).
Before this year, the 10% went to your private fund, the 24% went to the state fund, and you would have received pension from both.


At the very start of this year, the little more the active workforce of 3 million people, including me, faced the government's threat: you either go back to the state pension entirely, or if you stay private, you would still have your employer pay the 24%, but you would not receive the right for a state pension payment for it.

Only a hundred thousand of us called the obvious bluff and stayed. It was obvious because the present pension system has been an enormous strain on the state, on the long run it was bound to change.

Altough not yet voted on, the plan for this change has been leaked:
Instead of sinking your 10%+24% into the black void of the gross pension budget, everyone will get an individual account (you already had that on your private fund account, obviously). But, only the payments of the 10% will be registered there. The 24% will go to financing of the existing pensions, or whatever the rap is.
And your pension will be determined by the amount of money on this account, and your age and stuff.

In other words, it will be EXACTLY the setup they threatened us with, EXCEPT that there is no talk of interest, like you had with your private fund account (and it was pretty sweet, too).


What can I say to the 3 million poor bastards who were bullied into folding their hand? 

Why is the pension system so stretched? In the US, the taxes are something like 6.2% by the employee and 6.2% by the employer. I'm guessing the benefits are relatively generous relative to what you paid in?

I'm also not sure why you won't get a state pension. If your 24% are going to the current retirees, when you retire couldn't you draw on the 24% being paid by current workers?

[Admiral Yi]

It looks like they might be trying to transition to a Chilean-style quasi-private pension.

[Tamas]

Why is the pension system so stretched? In the US, the taxes are something like 6.2% by the employee and 6.2% by the employer. I'm guessing the benefits are relatively generous relative to what you paid in?

I'm also not sure why you won't get a state pension. If your 24% are going to the current retirees, when you retire couldn't you draw on the 24% being paid by current workers?

Well first of all, the current demographic trend of the country is just disastrous, and our equivalent of the Baby Boomers (a few years later generation in our case) is yet to hit retirement age.

Yes, also the pension system has been somewhat generous, but only in the light that AFAIK the communist government(s) just pissed the pension payments of their time away merrily like they did with every other penny the could find, so by all intents and purposes the democratic governments took over a pension system which was already running but from general state budget.

And ever since the pension budget has been a great tool to buy votes. We had a 13th month pension going for many years, and in the 2006 campaign there were actual debates between the parties on a 14th month pension payment as well, whereas in fact the 13th one alone made the whole thing leak money all over the place.

And moreover, in the early 90s, it seemed like a grand idea to "evacuate" a lot of jobless people into "disability pensions", which has stayed to be a reliable escape route for many citizens who saw no hope for reentering the job market. A bribe to the local doctor and you were set for a reduced pension until you reached retirement age.

The current government, to their credit, is trying to stop this practice.

And of course there is the matter of policemen, firefighters, soldiers, miners, and some other professions getting early full retirement.
There has been a lot of debate lately about these, after the government announced that they would just basically stop paying this to current and future (early-)retiree policemen and firefighters.
IIRC they eased up a bit following repeated demonstrations, but the principle remains the same.

And I can't really blame them, the current system has to go sooner or later. But their communication has been abysmal, and their approach haphazard and cruel.


So actually, all things considered, if what I told in my post will indeed be the new plan for pensions, it will be a surprisingly honest move from this government. They could postpone this stuff well after the next election. Maybe they are sure they will stay long enough to see such a draconian system pay off.

However, thinking about it, I do have some concern. You see, the plan says that people who went back to the state system will have their former private balance credited to their brand new individual state account. That's nice, except that (insane amount) of money is being spent away like there is no tomorrow.
So in a way the government WILL postpone this problem for decades, when the current converts to the state system will be pensioners and will be supposed to get their pension from a pile of money that was spent in the early 2010s.

[alfred russel]

Tamas, so it sounds as though the 24% is just going to become another part of tax revenues (used in the short term to cover the current pension system)? You would think that by the time you retire most of the current pensioners would be dead and you could receive a pension from the 24%.