Since Melania and Donald formally met with the Pope I suspect her transgressions may also have been forgiven.
Fighting for Pensioners?
With all propaganda means the Orbán regime tries to convince us that FIDESZ and only FIDESZ would be caring about retired Hungarians. I even got an email from the Corona Information Centre how great the government is because of restoring the 13th pension, and announced the payment. Spreading propaganda easily – and also to those who would never given their email address to FIDESZ – was the only reason for the obligation of having an unique email address for registering for vaccination. For vaccination I was called, not emailed. And it is impossible to tell the state no longer to send propaganda mails, they keep on sending. Clearly a violation of both Hungarian and EU law.
Back to the pensions. Let’s have a look onto the facts. Under the 1st Orbán government (1998 – 2002) there was no 13th month pension. This was legally introduced by the Medgyessy government (2002 – 2004,) but was the 1st time paid in full after Medgyessy was replaced by Gyurcsány. FIDESZ voted against the introduction of the 13th month pension. Despite Orbán declared that a 13th month would be too expensive in parliament, he promised during the election campaign of 2006 a 14th month as well. But Orbán lost and whatever propaganda tells, as long as Gyurcsány was PM the 13th month was paid. It was his successor, Gordon Bajnai, who decided not to pay the 13th pension any more, when Hungary was forced to introduce a severe austerity package, due to the global financial crisis that followed the Lehman Brothers crash. Although the world-wide crises was soon solved Orbán made no efforts to reintroduce the 13th month, but gave close to elections always one Erzsébet-utalvány (a Hungarian voucher accepted in many shops) with the value of not more than 10 000 Ft (as today 28 €.) It took to wait until the end of the 4th Orbán government, in 2021 was paid the 1st week of the 13th month and until 2024 should follow a week more every year. But when the polls first showed that FIDESZ could have difficulties in winning the 2022 elections Orbán in one of his Friday prayers declared on Kossuth Rádió that pensioners will get the full 13th month already a few weeks before election day 2022 ►HU.
Not to forget that Orbán decided to “nationalise” the saved money from the earlier compulsory private pensions. Officially because banks would be unreliable, in fact he used this money on his pet projects, for example to build the Felcsút stadium, and to use it for the general budget. Although many promises were made that all the money would be included into the state pension it didn’t happen. Just the contributions were regarded as if they were made to the state, all the profit from savings we lost.
Orbán also decided to raise the pensions not only according to the inflation, but a bit more. The opposition already declared to introduce the Swiss model, which takes into the account both inflation and the growth of wages and to keep both the 13th month and early full pension of women who worked for 40 years, as I reported ►EN. Napi.hu yesterday published a research of Pulzus under the title Pensions: The Government Opposes Virtually the Whole of Society. The minimum pension for those who have worked at least for 20 years has been raised the last time under Gyurcsány per January 1st, 2008. The amount is 28 500 Ft (80 €) per month! According to the research 94 % would raise this, 71 % to 100 000 Ft (282 €,) while 23 % would see this as too low. The remaining 6 % wouldn’t do this, 1/3 of them think 28 500 Ft a month would be fine, 2/3 see a problem for the state to finance this. Most of those who think the minimum pension should be above 100 000 Ft are below 40-years-old (27 %,) followed by 60 years and older (22 %,) the least (20 %) were between 40 and 59-years-old. The mid-aged group is largest among those who find 100 000 Ft a good value is the largest (78 %,) followed by the seniors (69 %,) and the young adults (65 %.) The higher the education the higher the share that agrees with 100 000 Ft, the same is about those afraid of being too expensive for the state, the lower the education the higher the share of those who wants more than 100 000 Ft. Those who agree with 28 500 Ft are 3 % of low educated, 1 % of high educated and none of the mid level educated. Interesting is that for those who find 28 500 Ft fine and 100 000 Ft not enough are living in villages, in the county seats the share of those preferring 100 000 Ft is the largest, followed by those living in Budapest, small towns and villages. All details and graphics you find here ►HU.
Hungary had last year 2 028 758 retired inhabitants ►HU, the average pension was 142 000 Ft ►HU (400 €), while the opposition has already stated that at the end of 2021 1.2 million pensioners got less than 130 000 Ft (366 €, see above.) So the median pension must be below that. In 2019 Népszava had the following facts ►HU: 579 561 pensioners got less than 100 000 Ft pension. 9 got above 2 000 000 Ft (3 634 €.) The largest share of pensioners got between 100 000 and 150 000 Ft. Knowing all these data the median pension is clearly between 100 000 and 130 000 Ft. In the end 1/4 of all pensioners would have profit from a higher minimum pension.
Allow me a few personal words. I am in the comfortable situation that I don’t need to rely the Hungarian part of my pension. So I decided to transfer the 13th propaganda month pension to Unity for Hungary, a part to my local district candidate, to realise the chance of switching the district, the rest for the central campaign.
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Thanks for providing the current data on HU pensions. Of course a 100,000 Ft pension a month comes to about only $330 USD which is less than half the minimum payment for the lowest eligible retired workers receiving social security benefits here in the USA. $1,543 per month is the average benefit in the USA. I have full military retirement which is about 50% of my pay as a US Army captain after 20 years of service around $3,000 and month (it is indexed to the rate of inflation) and a social security payment based on civilian income after military retirement now close to $2,000 USD a month. I also get close to free medical care for life, and nice free plot in a military cemetery if I want it too. My wife has a total pension package far higher than I do since she retired as a high paid health care executive.
Of course I have business income too along with individual retirement accounts which I built up by putting most of my salary as a reserve US Army into for years. So no matter the lower cost of living in Hungary, every time I see this data on pensions in Hungary it is stunning to me. When I have visited Esztergom and visited with retired relatives I have tremendous guilt even eating lunch with some of them who I know are sucking air for income. Even retired University professors make so much less than I do in pension benefits. But those retired workers here in the USA with only social security benefits and no other income constitute about 40% of those over 65 years old here. Many of that 40% are living below or close to what is called the federal poverty line for individuals (which is technically $12,880 a year for one person) depending on their geographical location in the USA because of much higher costs of living in many urban areas.
This situation with HU pensions is often discussed in the American Hungarian community after visits to Hungary, even by Fidesz supporters. I hate to say this but there is a sort of cynicism here that those who have never left Hungary knew what they were heading for as a retired person and need to take some risks in venturing to the western world post communism. I have to bite my lips and not respond because it is all not so simple as that.
I would say its actually a little different in the Polish American community here because there are many more people who have opted to retire back in Poland with US social security checks and Chase accounts transferring money to them each month largely in rural Poland. Many built retirement homes in Poland post communism that would cost vast fortunes in the USA and I have visited retired Polish Chicagoans who were skilled tradesmen living well there. There are even Polish American real estate agents here in Chicago that specialize in buying retirement properties for clients in Poland and other who set up full retirement packages for Polish Americans.
Taxes are not at problem if you generate no income in Poland according to all of them. There was a wave of American Hungarians in the early 1990s doing the Expat retirement thing in Hungary, but it seems to have slowed down.
I assume the quality of the healthcare system in Poland is higher than Hungary’s (that’d be hard to beat I guess) but still not on par with that of Western European countries. I doubt my wife would ever want to resettle in Hungary because of healthcare alone but not only as after spending so far 18 years in Belgium and even though she still feels Hungarian, she says she could no longer fit in Hungarian society that she finds too depressing and passive, too often settling for a lesser quality of life.
Off topic but a potential crisis for Hungary. Some of the US troops being deployed to Central Europe are civil affairs specialists being sent to prepare for a possible wave of Ukrainian refugees to bordering NATO countries if Russia did invade based on things I am seeing on the internet. This article https://notesfrompoland.com/2022/01/31/poland-ready-to-help-up-to-million-ukrainian-refugees-if-russia-attacks-says-minister/ discussed the planning going on in Poland. This article https://balkaninsight.com/2022/02/02/ukraine-russia-there-goes-the-neighbourhood/ discusses the current near total lack of preparation of Hungary for this possibility, even just for Hungarian speakers in Ukraine. The article indicates even Poland is not well prepared for this possibility either in reality.
The article states: ‘The Hungarian government under the Putin-friendly prime minister, Viktor Orban, is trying to play down the possible danger of a Russian invasion. But if conflict erupts, experts say the Hungarian government will carefully have to monitor the safety and security of the 130,000-strong ethnic Hungarian community in the Transcarpathian region, or Zakarpattia Oblast, the Ukrainian administrative division which borders the four EU countries. If ethnic conflicts are sparked and Hungarians are attacked, the government will have to react somehow. The same applies to a potential refugee crisis, the government has to be prepared to control the inflow, according to Tamas Csiki Varga, defense specialist and research fellow at the Institute of Strategic and Defense Studies at the National University of Public Service.”
The US newspaper the Wall Street Journal also today had an article about this https://www.wsj.com/articles/european-union-next-refugee-crisis-ukraine-russia-invade-troops-border-neighbors-poland-prepare-11644167578 (it is largely behind a paywall). According to this article https://cepa.org/an-alarm-call-for-the-eu-on-ukrainian-refugees/ the EU is at this point largely unprepared to assist a mass wave of refugees if Russia invades Ukraine.
Given this reality it might actually be a hopeful thought that the US CIA/NSA assessments predicting a possible Russian invasion of Ukraine are to put it simply bullshit to create a crisis. But my guess is even if they turn out to be wrong and Putin doesn’t implement an invasion these intel people are seeing some alarming things, because Biden is an old pro in dealing with CIA/NSA and he was totally burned by them in the lead up to the Iraq war see https://www.theguardian.com/commentisfree/2020/feb/17/joe-biden-role-iraq-war hopefully he looked hard at the evidence and did not simply give the spooks the benefit of a doubt hoping to promote preparedness among the NATO allies and push Ukraine to be more prepared for an invasion.
Fighting for pensioners? Is just like fighting for the people … or fighting for the Hungarians … but Fidesz is not.
Thanks for today’s article.
Since I was introduced in the national email address system by getting a vaccination, I get these emails you write about too. Being a foreigner, it is the proof that the regime is abusing the data.
What wonders me, is the following, why do many people not seem to remember this stealing the retirement funds, and the Viktor is even able to use pension as propaganda.
Collectively, people (that is electorates) have very short memories. Unfortunately this is not restricted to Hungary.
That may be true, but shouldn´t this emptying of the pension funds be a weapon in the hands of the opposition?
The propaganda machine of the regime always answers to the own scandals with about the same “scandals” of politicians of the opposition. The routine way to do this is via outlets like the Metropol that are spread free around Budapest. This is than taken over by the Magyar Nemzet to make it a “real story”. a nice example from today:
https://magyarnemzet.hu/belfold/2022/02/stromanok-moge-rejtheti-vagyonat-a-fovarosi-kozmucegek-csucsvezetoje
These articles you will never find in the foreign versions of the Nemzet.
Most people really believe that it was a good set to “nationalise” the pensions. No problems with markets going up and down, no problems with low interests, the state as safe harbour. That money is not growing in the state budget (there are no payments directly for pensions any more, neither by employers nor by employees) is not understood. Lack of the very basics of financial knowledge. When this was announced a former colleague asked me what he heard on the radio. I put it as easy as I could “the governments wants your money.” The 1st reaction was that he would take his gun and go to Budapest. Later he was happy for the assistance he got from Orbán, because banks are so bad! Without basic knowledge it is very hard to discuss, sentiments against banks are so much easier than facts.
And the regime is constructing scandals of the opposition with the most stupid messages indeed. While half the country is laughing about the poor PM that has no savings at all the regime press attacked Karácsony for his “wrong” declaration of assets. The lord mayor did not declare his family home! Of course he didn’t, since he is not owning, but renting from a private owner.
In the USA the primary retirement fund is the Social Security Trust Fund, it has always been nationalized since the New Deal Legislation of President Roosevelt (FDR) in the 1930s. It is composed of two parts the Federal Old-Age and Survivors Insurance (OASI) Trust Fund and the Federal Disability Insurance (DI) Trust Fund. Projections show the OASI fund remaining solvent until 2033, whereas the DI fund is projected to remain solvent until 2057, meaning that each trust fund is projected to be able to pay benefits scheduled under current law in full and on time up to that point. Following the depletion of trust fund reserves (2057 for DI and 2033 for OASI), continuing income to each fund is projected to cover 91% of DI scheduled benefits and 76% of OASI scheduled benefits. But neither system will go fully broke, which is constantly discussed by idiotic right wing commentators on social media. More than likely additional debt will be created and the bonds financing that debt will be bought up by international investors including Chinese multi-millionaires who are having trouble investing their cash in low risk investments domestically. We are too big to fail over here, Hungary is not, as was a country like Greece where pensions were slashed and health benefits cut as part of austerity.
The US system is financed primarily by revenues from Federal Insurance Contributions Act (FICA) taxes and Self-Employment Contributions Act (SECA) taxes. The US social security program was based in big part on the German system which became the first nation in the world to adopt an old-age social insurance program in 1889, designed by Germany’s Chancellor, Otto von Bismarck. Having been a Republican most of my adult life and fairly conservative I have to say the obsession with the idea in conservative circles that all pensions would be based on individual choice or lack there of is a form of insanity.
What the US had done is create a floor of support for the mass of people in their old age with our SSA system. The private retirement funds which are dependent on market forces and in some cases a government supported insurance plan called the Pension Benefit Guaranty Corporation (PBGC). The only plans are protected by the PBGC are really traditional private pension plans, commonly known as defined benefit plans, are protected by the PBGC, but not all. For example, certain plans covering only top executives or funded only by union dues contributions are not insured. These traditional plans have dramatically declined with the rise of the gig economy (https://www.investopedia.com/terms/g/gig-economy.asp) in the USA.
There are many different private retirement funds with complex taxation rules in the USA, most are totally uninsured. The military retirement system here in the USA is in fact based on the ancient Roman entitlement system for its legions, requiring officers and soldiers to survive war for 20 years to have an entitlement, whether it’s a land grant or what ever. There was also even back in the days of the Roman Empire some from of survivors grant for dead warriors families. As one General put is to me as a young officer modern critical care medicine has created a crisis because too many of us can now survive war and we are also creating many survivors with long term injuries.
If the SSA system collapses in the USA consumption will collapse and the world will spiral into a profound economic depression. So even the Chinese our supposed great rivals will not promote such a collapse by pulling money massively out of US security investments. There have been endless articles on the importance of US consumption and of consumer debt in the USA and its dynamics relating to the world economy (one of many is https://www.washingtonpost.com/business/economy/american-consumers-are-holding-up-the-global-economy-but-for-how-long/2019/08/17/9eb20740-c066-11e9-a5c6-1e74f7ec4a93_story.html ).
Just to be clear: Hungarian state pensions are paid out of the budget. Already pretty early Orbán had stopped collecting separate contributions for pensions or health care from employers, these were transferred into the “social tax,” which is paid into the general budget. This created a pension system, which remained constantly in deficit and is depending on aid through the budget. Since July 2020 the employees are no longer paying contributions for different insurance types, but a fix percentage with a minimal amount for all social insurances, allowing the government distributing the money without respecting the idea of contributing in pensions. Of course everything is collected centrally by the NAV. Since there is no separate funds for pensions these will be paid as long as the state can or the government wants – and the height is depending on the decision of the government. In election years this might be more than in others.
In the 1990s a compulsory private pension was introduced and in exchange the contributions to the state pensions were lowered. The private pension was a state licensed and controlled fund for saving money. The citizen had to choose from several providers. In 2011 the total value of these savings was about 10 % of the Hungarian GDP. This Orbán has “nationalised” (the official term) or stolen as Jan said. The amount paid into these funds was regarded as contribution thereafter, the complete capital burned by Orbán for useless projects. I think I don’t need to explain how much these funds would have grown during the last decade, even if not invested in high risk papers. At the end the taxpayer has to pay higher pensions from the general budget and the pensioner has less because he only gets a pension according to the state pension formula. Voluntary private pensions are still allowed as addition to the state system, but it was impossible to declare the compulsory funds to be voluntary. The voluntary pensions are only popular among those with higher income.