Bulgarian MPs to Discuss Controversial Changes to Pension Insurance

Politics » DOMESTIC | December 19, 2014, Friday // 07:58
Bulgaria: Bulgarian MPs to Discuss Controversial Changes to Pension Insurance Plenary chamber of Bulgaria's National Assembly. File photo

The Bulgarian Parliament is to discuss the proposed controversial changes to pension insurance on Friday.

Debates between trade unions and employers' organisations led to the right of free choice between making contributions to the National Social Security Institute (NOI) or the universal pension funds, Darik radio reports.

The employers' organisations reached unity against the proposed changes, while the Bulgarian Industrial Association (BSK) demanded a veto of the President on the changes of the Social Insurance Code.

According to the proposed changes, people entering the labour market for the first time will have the right of choice, but it will be a one-off privilege.

If one chooses to contribute to NOI then it will be not possible to switch to a private pension fund, while this change is possible if contributions are made to a universal pension fund.

Another controversial proposal is that those born after 1959 who already have chosen to make their contributions to a private pension fund will have to reaffirm their choice within a short period of time, otherwise their contributions will be automatically transferred to the solidarity fund of NOI.

The trade unions signed a memorandum of understanding with the government on Sunday, supporting the proposals of the main ruling party Citizens for European Development of Bulgaria (GERB).

However the employers' organisations have opposed the proposal, with one of them the BSK demanding in a letter to the President a veto on the proposed changes to the Social Insurance Code.

Initially, the Confederation of the Employers and Industrialists in Bulgaria (KRIB) were not firmly opposed and following a meeting with Finance Minister Vladislav Goranov even declared support for some of the memorandum's components.

Later it became clear that KRIB has joined its fellow employers' organisations and declared opposition to the proposed changes.

Prime Minister Boyko Borisov, who is in Brussels for the meeting of the European Council, said on Thursday that he is ready to make concessions to the pension insurance.

Several hundred people protested against the proposed changes in front of the Council of Ministers building on Thursday evening.

The draft budget of the State Social Insurance for next year foresees a freeze of retirement age, but an increase of four months of the insurable work experience.

The maximum insurable earnings for all insured persons will be BGN 2600, while the minimum for agricultural and tobacco producers will be BGN 300.

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Tags: Bulgaria, parliament, government, pension insurance, contribution, NOI, private funds, trade unions, employers' organisations
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