Bulgaria set to abandon civil service pension reform – report

Written by on June 7, 2012 in Bulgaria, Business, News - No comments

Despite making the issue a priority ever since the current Cabinet took office, the Finance Ministry now appears unlikely to push forward with reform of civil service pensions, news website mediapool.bg reported on June 7.

Currently, civil servants – including military personnel and police officers – pay no mandatory social security contributions; instead, these are paid on their behalf by the Bulgarian state. Furthermore, certain categories of civil servants, most notably Interior Ministry personnel, retire at a much earlier age than the rest of the labour force, putting an additional strain on Bulgaria’s annual Budget.

Although by no means the only reason that Bulgaria’s pension system routinely finds itself in deep deficit (estimated at about two billion leva this year), reform of civil servants’ pensions would put a big dent in the deficit. But, as with the Finance Ministry’s other plans to reduce the size of the public administration, the mooted proposals have proven very unpopular with those whom it would affect directly.

The Interior Ministry in particular, which routinely gets some of the largest budget allocations and has even avoided any cuts as the Government attempts to keep Budget deficit in check, has been a strong opponent of reducing its numbers.

Despite Prime Minister Boiko Borissov (whose political career was launched when he was appointed chief secretary of the ministry in 2005) saying last year that the ministry would reduce the number of civil servants (who receive the same early retirement perks without the associated dangers, as the police force does), influential Interior Minister Tsvetan Tsvetanov has been able to keep Finance Minister Simeon Dyankov’s sheers away.

The duo have often clashed on the topic last year, but Tsvetanov appears to have come on top in this duel of deputy prime ministers once again – the talks with that the Finance Ministry was scheduled to have this spring with trade unions on the issue of civil service pension reform have not been held, mediapool.bg said.

Although the employer organisations and trade unions have both submitted proposals to the consultative tripartite council – whose approval is desirable but not mandatory for new labour legislation – the Finance Ministry (the third party in the council) has been less forthcoming, the report said.

(Photo: Finance Minister Simeon Dyankov; by Finance Ministry)

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Alex Bivol is the news editor of The Sofia Globe.