Bulgarian MPs pass controversial private pension amendments

Written by on December 19, 2014 in Bulgaria - Comments Off on Bulgarian MPs pass controversial private pension amendments

Bulgaria’s Parliament passed on December 19 the amendments giving anyone born after December 31 1959 a one-off choice to switch from their private pension fund to the National Social Security Institute (NSSI).

The bill was passed with 120 votes in favour, mainly from GERB and opposition Movement for Rights and Freedoms, with 57 votes against, including from GERB’s partners in the ruling coalition. A total 35 MPs, mainly from the opposition socialists, abstained.

The amendments were discussed at a meeting between GERB and trade unions on December 14 and debated in the budget committee earlier this week. Both Prime Minister Boiko Borissov and Finance Minister Vladislav Goranov, whom some media reports identified as the author of the bill, defended the amendments as giving Bulgarians more choice – whether to stay with private pension funds or opt for the state-run NSSI. (For a detailed overview of the proposal, see The Sofia Globe report here.)

The bill was opposed by GERB’s partners in the ruling coalition, which said that the amendments were rushed and were not backed by an extensive analysis of the impact that the changes will have on the pension system.

Speaking in Parliament, Goranov once again defended the bill and said that the Cabinet was open to a wider debate, in the first three months of 2015, that would result in wider-reaching changes, including possibly an option for opting out of NSSI and back into private pension funds.

Earlier in the day, President Rossen Plevneliev said in a statement posted on the presidency’s website that changes to the pension system were needed, but should be taken only after extensive public debate. The proposal put forth by the Cabinet was “not merely a package of stabilisation measures, but a serious change to the pension system in effect since 2000”, which required agreement from trade unions and employer organisations, and should be accompanied by detailed financial impact assessments.

Employer organisations have opposed the bill, asking Plevneliev in an open letter earlier this week to veto the bill.

(Photo: Clive Leviev-Sawyer)

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