site.btaReformist Bloc, GERB Disagree on Pension Funds Issue

Reformist Bloc, GERB Disagree on Pension Funds Issue


Sofia, December 17 (BTA) - The Reformist Bloc and GERB failed to
 reach agreement on the pension funds issue, it emerged after
talks on Wednesday between the parliamentary groups of the
Reformist Bloc, GERB and ABV. The talks were hosted by National
Assembly Chair Tsetska Tsacheva and took place in the presence
of Finance Minister Vladislav Goranov, Deputy Prime Minister
Roumyana Buchvarova and representatives of trade unions,
employers' organizations and private pension funds.

On Tuesday, the National Assembly Budget and Finance Committee
approved a controversial motion entered by GERB, according to
which persons born after December 31, 1959 will be able to
choose, on a single occasion within one year after entering the
system, whether to have their supplementary compulsory
retirement insurance handled by the National Social Security
Institute (NSSI) or by a private universal fund.

"We didn't reach agreement, this was a difficult conversation,
futile at this stage," the Bloc's Co-floor Leaders Radan Kanev
and Nayden Zelenogorski said after the meeting.

"The responsibility for the financial standing of the Stand
rests with GERB, which was mandated to form a cabinet. Parties
which have won 4-5 per cent in the elections can choose to
support it or not," Goranov commented.

Earlier in the day, Kanev said he was dissatisfied by the
Finance Minister's failure to explain why he urgently came up
with this proposal.

"I was motivated by a freedom of choice," Goranov told
journalists and denied that the idea was to patch up the NSSI
budget deficit. He said the motion was entered so urgently
because GERB is convinced that it is necessary. "There is no
point putting off things on which we within the GERB Party have
made a decision and have convinced ourselves that they make
sense," he explained. "Anyway, nobody can deprive the Prime
Minister and GERB of the possibility to bear responsibility for
State governance and especially for the State's financial
stability."

Before that, Zelenogorski advised his GERB partners to improve
their coalition culture. "I don't think that the behaviour of
our GERB colleagues was up to the mark," Kanev agreed. In his
opinion, a reasonable solution is to continue the talks. On
Tuesday he discussed the matter with Prime Minister Boyko
Borissov, but was not left with the impression that he was ready
 for a compromise.

"It would be exceedingly alarming if a comprehensive change of
the pension model is voted through by the full house thanks to
the support of entities outside the government majority," Kanev
said. For the time being, he declined to say whether the Bloc
will withdraw from the coalition because he still hopes for a
positive solution until Friday, when Parliament is due to hold a
 second-reading debate on the 2015 Public Social Insurance
Budget Bill and the 2015 National Health Insurance Fund Budget
Bill. "If things remain unchanged, the Reformist Bloc will not
support the provisions related to the pension funds but will
back the budget as a whole," the Co-floor Leader specified.

On Thursday, the ABV National Council will decide how the
coalition will vote on the changes in the pension system.

Meeting earlier in the day, representatives of the Reformist
Bloc, of the retirement insurance companies and of the
employers' organizations voiced concern over the changes planned
 in retirement insurance. Kanev said that the proposals to
reverse the course of the pension reform emerged oddly "over a
cup of coffee on Sunday and only within the second reading of
the Public Social Insurance budget." "They lead to a serious
crisis resulting from the way in which this decision is made,"
the Reformist Bloc Co-floor Leader commented. He pointed out
that the Bloc shares the private pension funds' concerns that
the rushed change may plunge the capital market into a severe
crisis.

"The decision to change the model of the pension system will
disrupt the existing mechanism of its operation," said Nikola
Abadjiev, Chairman of the  Bulgarian Association of
Supplementary Pension Security Companies. He argued that the
decision was precipitated and was taken without any reasoning
and financial justification. Replying to a reporter's question,
Abadjiev said that the funds do not operate at a risk. "The
activity of the universal pension companies is supervised daily.
 The Financial Supervision Commission controls every
transactions that the pension funds effect," he commented,
adding that the funds have achieved a sufficiently high return
on investment, some 6 per cent for the last reporting period.