site.btaPrime Minister Borissov: Increasing Retirement Age Is Non-negotiable

Prime Minister Borissov: Increasing Retirement Age Is Non-negotiable

Sofia, May 13 (BTA) - Addressing a National Council for
Tripartite Cooperation meeting on Wednesday, Prime Minister
Boyko Borissov said that increasing the retirement age was one
of the points that were non-negotiable. The meeting was set to
discuss a package of amendments to the Labour Code.

Participating were representatives of the nationally represented
employer and trade union organizations, the Prime Minister and
Deputy Prime Minister and Labour and Social Policy Minister
Ivailo Kalfin.

The proposed changes envisage a gradual increase of social
insurance contributions and the retirement age for women and
men until it reaches 65 for both in 2037, introduction of
one-day employment contracts in agriculture and more flexible
limits of the 40-hour week.

At the beginning of the meeting Kalfin said that the existing
pension system was not good and in view of the ongoing
demographic processes it would require more budget subsidies,
limit pension growth and undermine overall trust in the system.

Prime Minister Borissov told participants in the meeting that he
supported Kalfin's proposals for reforms, voicing a hope that a
middle ground was found. Borissov added that the pension reform
has a time span of dozens of years. "For years we have been
talking about the pension reform, but each year the government
gives 1.8 billion leva to pay the current pensions," he said. "I
am familiar with the finer points and there are aspects that
can be debated but some can not and retirement age is one of
them," underscored Borissov.

He went on to say that given the demographic collapse increasing
retirement age was unavoidable, adding that Labour Minister
Kalfin made every effort so that the increase was gradual. He
voiced a hope for understanding and cooperation.

Dimiter Manolov, President of the Podkrepa Confederation of
Labour, outlined the common ground of the trade unions and
employers regarding the proposed pension reform. "We share the
view that the security sector should meet retirement age
requirements like all other sectors," he said.

The social partners support the measures intended to shrink the
grey economy by limiting cash payments. Also, something must
change in the system of awarding invalidity pensions. The
maximum contributory income should be set using an objective
methodology because the administrative method does not yield
good results.

Speaking on behalf of the trade unions and employers, Manolov
added that the existing three-pillar model of the retirement
insurance system should be preserved and developed.

The social partners voice reservations about the option for
people to have the money accumulated on their individual
accounts with a universal fund transferred to the Silver Fund
(the State Fund for Guaranteeing the Stability of the State
Pension System).

The employers reiterated their objection to an increase in
social insurance contributions. Vassil Velev, President of the
Bulgarian Industrial Capital Association (BICA), said that since
contributions started to decrease, contributions to the
National Social Security Institute grew by 15,000 million leva
because the average contributory income tripled and jobs
increased by nearly 500,000.

According to Plamen Dimitrov, President of the Confederation of
Independent Trade Unions in Bulgaria, the point is whether the
proposals ensure protected flexibility which employees can use
depending on their needs. As to one-day employment contracts,
Dimitrov said it was unclear how an employee would be paid
remuneration and remain entitled to unemployment and welfare
benefits.

Vassil Velev said BICA was in favour of one-day contracts unless
they meant that the unemployed would lose their benefits.

Kiril Domouschiev, President of the Confederation of Employers
and Industrialists in Bulgaria. said that once the effectiveness
of one-day employment contracts was tested, they could be used
in sectors other than the seasonal picking of agricultural
produce.

Podkrepa President Dimiter Manolov countered by saying that
those contracts would jeopardize the whole labour market if
employed in other sectors. He argued that this measure had not
had a positive effect anywhere in the world.