site.bta Public Board in Reformist Bloc Urges Postponement of Pension Insurance System for Half-Year

Public Board in Reformist Bloc Urges Postponement of Pension Insurance System for Half-Year

Sofia, May 3 (BTA) - The Public Board of the Right-wing Reformist Bloc urged Tuesday the Finance Minister to withdraw changes he has proposed in the legislation concerning the handling of personal pension accounts.

The Reformist Bloc's Public Board argues that the proposals should be put to broad discussion, to last at least for six months, and should wait for the stress tests of pension funds to be completed (due in late December). Only then, when results can be analyzed, decision can be made one way or another, Grozdan Karadjov of the Reformist Bloc told the press in the headquarters of his Democrats for Strong Bulgaria (DSB).

Тhe Finance Ministry has put up for public discussion revisions to the Pension Insurance Code envisaging that the personal pension accounts of workers - the so called "second pillar" in pension insurance - be transferred to a common pension pool that will allow pensioners to draw a second pension for life. This means, however, that those pensions will cease to be inheritable.

The Labour Minister, pension funds, employer organizations and some politicians argue that  the second-pillar pension accounts should remain individually managed and inheritable.

Karadjov said the stress tests will show whether there are any bad apples among the pension funds, and only then can the law be changed.

Karadjov argued that a reasonable solution is to increase the contributions to the universal private funds and lower the contributions to the public pension insurance fund (the National Social Insurance Institute).

The Reformist Bloc's Martin Dimitrov and Georgi Ganev say that what the Finance Minister proposes adds up to nationalization and goes against the Constitution which says that people are free to manage their own property.

They argued that rushing the Social Insurance Fund revisions between Easter (May 1) and the national holiday (May 6) and behind the back of the Labour Minister raises suspicions among the Reformist Bloc about the motives of the revisions' authors.
 
They suspect that the aim might be to lower the market price of private pension funds so that one of the biggest can be acquired at a lower price by a certain buyer. "This is a criminal scenario," said Karadjov.

He, however, would not name the said pension funds or the potential buyer.

He said that another effect of the changes will be to keep people in fear and make them easier to manipulate during elections, or to manipulate them into transferring their money to the National Social Insurance Institute. "This is likely another of [Finance Minister Vladislav] Goranov's goals: to bail the public insurance fund which is chronically underfunded," he said.

Karadjov said that if the proposed revisions go through in the legislature, it will be the second biggest theft of people's money after the failure of the Corporate Commercial Bank in the summer of 2014.

The three Reformist Bloc representatives argue that the Finance Minister has not shown any calculations or an impact assessment of the proposed changes, nor has he said how much pensions would increase if his proposal becomes a law.

Martin Dimitrov said that these are private funds and people should be free to decide whether they want a second pension for life or for several years, but in any case it should be inheritable.

Georgi Ganev said that "GERB and its ministers have an obsessive idea of snatching the pension funds' money": the universal funds already have over 7 billion leva from pension contributions and the professional funds over 8 billion leva.

The first second-pillar pensions are due to be paid in 2022-2023.

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By 16:09 on 23.01.2025 Today`s news

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