site.btaNew Pension Calculation Rules to Be Revisited after Impact Assessment Finds They Will Lower Some Pensions

114 ECONOMY - PENSIONS - MEETING - CONTROVERSY amplified

New Pension Calculation Rules to Be Revisited
after Impact Assessment Finds They
Will Lower Some Pensions


Sofia, March 19 (BTA) - Following Prime Minister Boyko Borissov's meeting with the trade unions and the National Social Security Institute (NSSI) here Tuesday, steps will be taken to make sure not a single person's pension is lowered by revisions to the pension calculation rules that took effect at the start of 2019, Labour and Social Policy Minister Bisser Petkov said. The meeting was held a day after the National Social Security Institute (NSSI) released an impact assessment saying that the
changes in the pension formula will lead to 31.3 per cent of new pensioners getting a smaller pension than the one they would have received under the old rules.

Based on data on 67,881 insured persons who will qualify for retirement in 2019, the NSSI impact assessment also found that 56.8 per cent would get a bigger pension and 11.9 per cent would not be affected by the new rules. This is the effect of excluding the contributory income for 1997, 1998 and 1999 when calculating the individual coefficient of the persons to receive pensions after December 31, 2018.

The analysis also found that the changes will lead to a drop in expenditures for pensions by 9.1 million leva in 2019, which is only 0.09 per cent of the total outlays for pensions in the Public Social Insurance Budget for this year.

Further talks with experts will decide what specific action needs to be taken to make sure nobody gets a smaller pension, the Labour Minister said after the meeting.

NSSI Governor Ivaylo Ivanov said that people who retire from this year onwards will have their pensions calculated by both the old and the new formula, and each will be free to choose which one will apply. He said the legislation will probably have to be changed.

Assya Goneva of the Confederation of Independent Trade Unions in
Bulgaria said that Prime Minister Borissov asked the Labour Minister and the NSSI experts to discuss the legislation revisions that are needed.

Labour Minister Petkov recalled that the argument in favour of revisions was that there was a need to minimize pension frauds and make sure the pension adequately reflects the pensioner's social insurance contributions.

The NSSI Governor said the NSSI has a budget of 10 billion leva for pensions, which is enough to make sure no pensioner is short-changed.

To date, no new pensioner has had his or her pension calculated
by the new formula (excluding the 1997-1999 period).

Deputy Prime Minister Tomislav Donchev, who also attended the meeting, said that "nobody in his right mind would go ahead and cut the pensions of Bulgarian people to save 9 million leva".

In a statement, the VMRO party of the power-sharing United Patriots nationalist coalition called for applying the old formula to all new pensions until a widely-supported compromise is found.

At a news conference in the party headquarters, Bulgarian Socialist Party leader Kornelia Ninova said that all three governments of Boyko Borissov, in combination with various partners, including ABV and the United Patriots, have pursued a consistent policy harming the interests of pensioners. She also said that her own party has been a staunch opponent of the government's pension reform since 2015. RY/LN/LY
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