site.btaPresident Plevneliev Concerned over Contemplated Changes in Pension System

President Plevneliev Concerned over
Contemplated Changes in
Pension System


Sofia, December 19 (BTA) - President Rosen Plevneliev expressed
concern over contemplated changes in the pension system. He set
out his position in a special statement made public Friday on
the 2015 Public Social Insurance Budget Bill.

Earlier this week, the government entered a motion according to
which persons born after December 31, 1959 should be able to
choose, on a single occasion within one year of entering the
system, whether to have their supplementary compulsory
retirement insurance handled by the National Social Security
Institute (NSSI) in a first pillar pay-as-you-go system or by a
private universal pension fund in a second pillar fully-funded
system.

"The Head of State has repeatedly said that reforms in the
social sector have a direct effect on the broadest scope of
citizens, often in a vulnerable position. In the social sector,
the results never come fast which is why continuity in
implementing reforms among the governments, especially unpopular
ones, is extremely important," Plevneliev wrote in his
statement.

He recalled that the caretaker government of Prime Minister
Georgi Bliznashki focused its efforts on the social sector and
prepared proposals for sustained reform solutions in the social
insurance system, which were then subject to broad discussions
by experts, the unions and employers, and presented them to the
present government.

"The need of a pension reform is beyond doubt and the proposed
measures should undergo detailed analysis and impact assessment,
and be explained clearly to the public and discussed with the
social partners," the presidential statement also said.

Considering the limited time that remains for adopting the
Public Insurance Budget Bill and the National Budget Bill for
2015, both of which are essential for the normal functioning of
the State, and considering that a thorough pension reform
concept has not yet been prepared, President Plevneliev hailed
the idea for allowing a period of three months for preparation
and public discussion of the reform measures that need to be
taken.

The President said, however, that the measures proposed in the
Public Social Insurance Budget Bill and the Social Insurance
Code are not merely stabilization measures: they are a social
revision of the existing pension insurance model which has been
effective since 2000. "Such serious conceptual changes need to
be effected in compliance with the principles of social
dialogue," he says.

The proposed changes also need to be put to an impact
assessment, especially an assessment of the financial
consequences for the insured persons, for the National Social
Insurance Institute, the pension insurance companies and the
capital market in Bulgaria.

The President argued that the intended introduction of a right
to a single and irreversible decision by people to pay pension
insurance only to the National Social Insurance Institute and be
never able to subsequently switch to a pension insurance fund,
effectively restricts people's right to choose.

Plevneliev urged the power-holders to see the biggest challenge
to the social insurance system in Bulgaria: the low public
confidence. "An indication of this is the huge number of people
who do not pay pension insurance," he added.

This is is why the Head of State called for a responsible debate
in the efforts to find a sustained solution within the proposed
three-month period during which a comprehensive concept can be
prepared, complete with an impact assessment, with measures to
address the two key challenges: ensure the stability of the
pension insurance system and improve adequacy of pension. PK/LN/

/СН/