New Europe

Bulgaria

December 15, 2007

The pension age in Bulgaria would not be raised, Emilia Maslarova, Minister of Labour and Social Policy, said in an interview for Info Radio. “I would like to be definite about one thing. This issue has not been brought up either before the government or before the Supervisory Council of the National Insurance Institute. Our pension system was introduced in 2000. It could not be reformed every 10 years. This destabilises, takes away all motivation, and does not give security to anyone.

I would like to underline categorically that at this stage the issue of pension age is beyond any discussion. There are alternatives under discussion of how people should be stimulated if they want to put in extra hours of work, so that their pension becomes higher when they retire,” Maslarova said. She added that a year after becoming eligible for retirement, the calculations would be equal to three years of work experience. Currently, every year of work after turning the pension age equaled 1.5 years of work experience for elderly people. At the same time, however, the issue must be raised whether pensioners could work and receive a pension simultaneously, the Social Minister said.

For the moment, experts were deliberating whether they should deduct half the pension from every working pensioner. The ban on elderly people working was part of the 14 priorities for the development of pension system in Bulgaria, drawn up by the council. According to Lalko Dulevski, Head of the Economic and Social Council, or the so-called citizens’ parliament, it was not normal for elderly people to drain money from the state and, at the same time, make a salary with no taxes levied on it. Maslarova launched the idea of setting up a stable reserve fund and pursuing a consistent policy, supporting the public pension system in the period of a strong demographic pressure. This happened during a discussion dedicated to the problems of the pension system in Bulgaria, organised by the Economic and Social Council.

Maslarova pointed out that in 2008 the planned deficit in the state and social insurance funds would reach around two billion levs, and if the present tendencies remained valid for the next three years, the balance of the state and social insurance would be negative and would amount to three to 3.5 percent of Gross Domestic Product (GDP.) According to forecasts, the population would decrease because of the negative demographic tendencies and the load on the economically active sector of the population would become greater, Maslarova also pointed out and went on to say that the value of the demographic significance coefficient would increase from 25 percent in 2006 to 30 percent in 2025, while in 2050 it would be 38 percent.

Finance Minister Plamen Oresharski focused on the need to seriously increase the share of private pension insurance. He said the increase of the pension culture of consumers and ensuring an adequate level of investment security merited greater attention. 

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