Bulgarian PM Announces Cabinet's Final Retirement Plan

Business » FINANCE | November 1, 2010, Monday // 08:47
Bulgarian PM Announces Cabinet's Final Retirement Plan: Bulgarian PM Announces Cabinet's Final Retirement Plan According to the latest plan of the cabinet, by 2024 the retirement age would reach 65 for men and 63 for women. File photo

The required years of service for retirement in Bulgaria will start going up by four months per year, beginning January 1, 2012, Prime Minister, Boyko Borisov, announced.

In an interview for the TV channel Nova Televizia Sunday evening, Borisov read what he vowed to be the final plan of the cabinet for retirement reform, which is to be voted on Wednesday by the Council of Ministers.

The gradual increase of the years of service would continue to 2020 to reach 40 years for men and 37 for women.

After the increase of the years of service, the retirement age will begin going up in 2021 by six months per year to reach in 2024 65 for men and 63 for women.

"I listened to them all – trade unions, employers, financial experts. This is it. This is the decision," Borisov said, adding he had met over the weekend with Social Policy and Labor Minister, Totyu Mladenov, Finance Minister, Simeon Djankov, and the Director of the National Social Security Institute (NOI), Hristina Mitreva.

The PM further stated he was to present what he called "the best retirement reform in Europe" to trade unions and employers on Monday.

According to Borisov, the new plan would help eliminate the deficit in the "Retirement" fund within NOI by 2017, and after that begin accumulating revenues.

On Friday, the National Revenue Agency announced that it expects to collect nearly 5% less in insurance contributions in 2010 than what has been projected, meaning the NOI deficit of BGN 2 B for 2010 will go up by another BGN 270 M.

The new retirement reform, announced by Borisov, is a compromise between Djankov's insistence to begin increasing the years of service and retirement age as early as January 1, 2011 and the demand of the trade unions, backed by Mladenov, to postpone it for 2015.

Also on Friday, the trade unions left the Three-Way Council meeting with the cabinet and the business, outraged by the Finance Minister, threatening country-wide strikes and protests.

In addition, Borisov informed Sunday that pensions of people eligible for early retirement (police, military, pilots, miners etc) would be paid by NOI until December 31, 2014, instead of the previously announced 2013.

The move was triggered by the fact that private retirement funds admitted they do not have enough money to begin paying pensions to the above said workers in 2011. These private funds are to start paying pensions in 2015.

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Tags: trade unions, employers, pension reform, insurance contribution, Simeon Djankov, International Monetary Fund, IMF, Bulgarian Industrial Association, National Insurance Institute, NOI, Podkrepa, Confederation of Bulgarian Independent Syndicates, KNSB, retirement reform, Boyko Borisov, Retirement age, required years of service, early retirement
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