The objective of the comprehensive pension reform currently under way in Hungary is to return to the two-pillar pension system, based on social solidarity on the one hand and voluntary contributions on the other, which is in place in eighteen EU Member States, from the current three-pillar system which is hopelessly threatening the budget balance, and is financially unviable in the short, medium or long run. Having accomplished this transformation, the government is committed to maintain and support voluntary private pension funds parallel to the state-run social security pension pillar.

In order to reach the targeted balanced budget required from the social security pension system, pension benefits must be separated from non-pension or welfare benefits which should be accounted as government budget items. As part of the transformation of the Hungarian public finances system, a principle will be laid down in the new law on public finances that pension benefits can only be financed by pension contributions without utilizing other budget resources.

The costs of this reform must be financed by the merging of the state and quasi-state pension pillars without additional resources from the government budget.

You can find more details in the attached document.