Bulgaria's Minister of Labor and Social Policy, Totyu Mladenov, says the soundest decision would be to delay by one year the changes in the early retirement provisions.

The statement was made Monday, in connection with the previously expected in 2011 amendments in payments to workers eligible for early retirement.

These payments were planned to be made from private retirement funds until the said employees reach the current regular retirement age – 60 years for women and 63 for men. After that, they would receive pensions from the National Social Security Fund (NOI).

The postponement was triggered by the fact the private funds lack enough money while the idea of the cabinet to nationalize them and transfer their resources to NOI outraged both the funds and the business.

Last week, Mladenov launched the proposal to create a new fund within NOI to deal with social security payments for employees eligible for early retirement, which in Bulgaria are called first and second category workers i.e police, military, pilots, etc. The fund was to replace the existing professional retirement funds.

According to the Minister, the one year delay would require another BGN 18 M from the budget of the State Public Social Insurance. The business says transferring the pensions of first and second category workers to private retirement funds would reduce the NOI deficit by BGN 500 M.

Mladenov countered Monday that the additional one year would give the cabinet, the labor unions and the business, the opportunity to find the best solution to guarantee funding for early retirement. The early retirement reform was already delayed twice – from 2006 to 2008, and then to the end of 2009 and 2010.

The very first version of the amendments of the Social Insurance Code provided for the reform to begin at the beginning of 2013, while the labor unions wanted even a longer delay.

The early retirement and other issues are still debated by the so-called Three Way Council between the cabinet, the labor unions and the employers regarding the retirement system.

Mladenov informed the agreement could be signed in one to two days, adding it had been delayed because "someone in Bulgaria did not want to have such an agreement in order to stir chaos in the country."