Organizational and Administrative Changes in The Hungarian Pension System in The Last Ninety Years
Organizational and Administrative Changes in The Hungarian Pension System in The Last Ninety Years

Summary/Abstract: The aim of the present study is to present an outline of the history and development trends of Hungarian pension insurance in the 20th century and in the first half of the century. The description and processing of all the legal provisions leading to the development of pension insurance may be limited, so I had to select in the material of the set of rules collected and awaiting evaluation. This selection is arbitrary, but I hope that it adequately serves the set goal, to outline the historical framework of the analyzed institutional system.We can find the footsteps of the social insurance even before introduction of the obligatory sickness insurance in Hungary. The early background was developed in the spirit of self-help and taking common risk in the 13th–14th centuries. The increasing danger derived from working conditions and the solidarity made miners form associations. Also industrial workers established voluntary mutual benefit societies based on the principle of collective support.The Hungarian pension system has a history of nearly a century. In chronological order Hungary is the third state in Europe where the insurance obligatory in case of sickness was enacted by law on 1 April 1892. Sick-relief funds provided healthcare services, medicines, medical aids, sick pay, maternity benefit and funeral allowance. The year of 1907 was the next milestone in the development, when employers' liability insurance for industrial and commercial workers was introduced. The Act on sickness and employers' liability insurance enforced in 1928 regulated the services provided by OTI (National Social Insurance Institute) for decades. Until 1928 there wasn’t compulsory pension system in Hungary, but several acts dealt with this question. The first step was the pension system of the mineworkers in 1925. The Act XL. of 1928. established the old-age pension system of industrial workers. Insurance became available for a number of occupations. The policy –holders were entitled to obtain old-age pension after paying a contribution for 400 weeks and the age of 65.The Act XXIII. of 1934 dealt with the pension system of the lawyers, and the Act XXXVI. of 1936. regulated the agricultural social insurance.Similarly to many developed countries, after- and a consequence of - World War II the previous fully-funded system was converted into a pay-as-you-go system, which allowed for its standardization, and by 1975 it gradually grew to cover all persons who had income from work.

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