Hungary has made great strides in reforming its pension system in recent years. CIPE has supported this effort since 1996 by cooperating with the Hungarian Ministry of Finance and Pension Supervision, as well as USAID, the World Bank, and the U.S. Treasury Department.
CIPE's major contribution to the joint reform efforts has been to provide advice from those in Argentina, Chile, and the U.K. who have already experienced similar pension reforms. CIPE helped to design a specialized computer model that assisted decisionmakers to assess various economic and demographic scenarios, enabling the Hungarians to make more informed decisions in drafting the law. Later, the project emphasized educating Hungarians about the new system, how it affects them, what investment vehicles are open to them, and factors involved in making these new choices. Through informational brochures, telephone hotlines, the Internet, and mobile units, information is accessible even in Hungary's more rural regions. CIPE continues to focus on supporting a larger effort designed to provide technical assistance to the Pension Supervision. This effort highlights information technology and processes which will make it possible to fully implement the new system, as well as adequately monitor the funds and maintain proper records.
As of January 1, 1998, the new pension system maintains a scaled-down state-guaranteed pension, while most individual pension savings are being privately managed. To date, there are 25 approved funds operating, with more than 1.1 million Hungarians in the new system.