RB Warns Proposed Change to Pension Law Might Destabilise Coalition

Politics » DOMESTIC | December 18, 2014, Thursday // 15:03
Bulgaria: RB Warns Proposed Change to Pension Law Might Destabilise Coalition Prime Minister Boyko Borisov (L) watches as Radan Kanev (R) prepares to speak in Parliament. Photo BGNES

The Reformist Bloc (RB), the junior partner in Bulgaria's minory government coalition, on Thursday warned that the proposed controversial amendments to the pension insurance law might destabilise the coalition.

GERB jeopardises the parliamentary majority and the stability of government,” said the spokesperson of the RB Radan Kanev in Parliament, criticising the intentions of GERB to amend the pension insurance laws without proper consultations. The proposed change was agreed at a sudden meeting between GERB leader Boyko Borisov and the trade unions on Sunday.

“These amendments were coordinated neither with the state social insurance fund (NOI), nor with the social partners. It hasn't been discussed by the Government or approved by the parliamentary social policy committee,” Kanev noted.

“Such forceful methods with unclear motivation were typical of the previous Parliament and eroded the trust in the previous majority and the Oresharski government.”

According to the new idea, the employees born after 1959 would be forced to choose whether to transfer the 5% of their social insurance contributions now held in their own name at private pension funds to the solidarity state-run fund NOI, or to keep the current situation in which 12% of the contributions go to NOI and 5% to a private pension fund.

Each employee would have the option to choose once in a lifetime.

Those who start their first job, would have a year to decide whether they want to contribute only to NOI, or to NOI and a private fund. They would also have only one chance to choose throughout their career.

The proposal was criticised by the political parties, the business and economists, calling it a “nationalisation”, while GERB functionaries declared the amendments “democratic”.

The Bulgarian Industrial Association (BIA) said they would ask President Rosen Plevneliev to veto the amendments, if Parliament approves them.

“Neither of the main institutions and specialists on the matter were involved in a detailed and profound debate on the proposed amendments to the pension insurance system,” BIA noted in a statement.

”The refusal to engage in a social dialogue, the refusal to adhere to fundamental principles and global labour conventions erodes the industrial relations by affirming the model of party and government control over social cooperation by engaging with convenient and easy to manipulate social partners.”

The ABV representative in the Government, Social Policy Minister Ivaylo Kalfin, noted that the amendments were rushed through, adding that he would keep the 5% of his contributions in a private pension fund.

“This is surprising,” Kalfin said. “The proposal does not solve any of NOI's problems, but would rather destabilise the entire system.”

Meanwhile, members of the public are organising themselves through the social networks and on Thursday evening are holding a protest under the slogan “Say no to theft”.

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Tags: Radan Kanev, Boyko Borisov, GERB, NOI, pensions, contributions, insurance funds, private, Reformist Bloc, nationalisation, pension, insurance, business

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