Bulgarian Labor Minister Confirms Gradual Retirement Reform

Business | July 29, 2010, Thursday

Bulgaria's Social Policy and Labor Minister Totyu Mladenov, says changes in the retirement reform will be submitted for approval with the Council of Ministers next week. Photo by BGNES

The number of years of service required for retirement will increase gradually beginning January 1, 2011, Bulgaria's Social Policy and Labor Minister, Totyu Mladenov, reconfirms Thursday.

Mladenov made the announcement after a meeting with the parliamentary group of the opposition left-wing Coalition for Bulgaria, led by the Bulgarian Socialist Party (BSP).

The Minister explained the required number of years will go up by 1 in 2011 and with 1 more in 2012 and 2013 each to reach the planned 37 years for women (currently 34) and 40 years for men (currently 37). The retirement age will remain 60 years for men and 57 years for women, Mladenov reiterated.

The emergency measures, which were debated for several days this week by the so-called Three-Way Council between the cabinet, the employers and the labor unions, aim at securing better collection of revenues from insurance contributions and will be submitted for approval with the Council of Ministers as early as next week, according to the Minister.

Mladenov was, however, firm the amount of the mandatory insurance fees should not go up as the left-wing wants because such move would not help the collection of revenues.

“The National Social Security Institute (NOI) has a very hard time collecting insurance now, what will happen if we increase this fee even more,” the Minister says, reaffirming his earlier statements the situation at NOI is dramatic.

The NOI deficit, the ruling center-right Citizens for European Development of Bulgaria (GERB) party says they inherited from the previous Socialist-led cabinet, is estimated at BGN 2 B and increased by another BGN 200 M in the first half of 2010 over low revenue collection.

Mladenov further pointed out that it is crucial for the measures to be applied in January 2011 so that the stability of the social security system can be guaranteed in the next four years, adding increasing the required years of service is very important because people, who know they need those years to retire, would avoid working without a labor contract.