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← Overview Database of Innovative Social Policies in Europe

Changes in the indexation of pension benefits

Country of implementation
Hungary
General short description of the innovation
/ Concerning the indexation of pension benefit, new rules has been effective from 2010. The weight of the two components of the index, changes to consumer prices and net earnings, will depend on the rate of economic growth, with a higher weight on the price index during slower economic growth. Under 3% of GDP growth, state pension payouts should be increased by the price index. In case of a 3 to 3.9% of GDP growth, mixed indexation should be applied in a proportion of 20% to 80% between valorization and following real wage growth; for 4 to 4.9% of GDP growth, the proportion would be 40 to 60%, and for 5% or higher growth, the (originally universal)"Swiss indexation" would apply. / /
Target group
Older Workers
Policy Field
  • pension
Type of Policy
  • public
Duration of the policy
starting date: Jan 2010
Scope of innovation
  • Scope: structural
  • Budgets: cannot be interpreted in this context
  • Number of intended beneficiaries: More than 2.5 million pensioners
  • Spatial coverage: national
General description of (intended) objectives and strategies
In Hungary the pension in payment has been indexed half to wages and half to prices since 2001 but further ad hoc increases were applied. / Annual adjustment rules are changed in effect from 1 January 2010. From 1 January 2012 pensions in payment are adjusted to changes in consumer prices, thus the indexation is inflation-based. /
Nature of the innovation-short-term perspective
reducing the expenditure of the social system
Nature of the innovation-long-term perspective
reducing the expenditure of the social system especially in recession periods
Type of innovation
  • new policy, practice or measure
New outputs
  • benefit level
Intended target group
Elderly, pensioners, 2.5 million people
Employers-private institutional actors
not involved
Actors involved in policy-making/implementation and/or evaluation
  • making/implementation and/or evaluation-agency or national social insurance body
  • making/implementation and/or evaluation-central state
  • making/implementation and/or evaluation-private not-for-profit organisations (e.g. Third Sector organisation or NGO)
Intended output
  • benefit level
Intended and unintended outcomes
the entire elderly population
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