site.btaProposed State Social Insurance Budget Fails to Get Support of All Unions and Employers

The National Council for Tripartite Cooperation (NCTC) of the government, unions and employers failed to agree on supporting for the proposed budget of the State Social Insurance (SSI) for 2024. Only some of the employer organizations back it and the trade unions set conditions in exchange for their support.

The Association of Industrial Capital in Bulgaria (AICB) is opposed to the proposed SSI budget. “Our opinion is that a pension reform should be carried out after broad public consultation,” said AICB’s Dobrin Ivanov. In his words, there should be a broad debate and agreement on increasing the retirement age and increasing the weight of the second pillar of pension insurance (with private pension funds).

AICB is also strongly against the proposed increase of the minimum wage to BGN 933 next year and of the maximum contributory income.

The Bulgarian Industrial Association confirmed its position in favour of the SSI budget bill.

Tsvetan Simeonov of the Bulgarian Chamber of Commerce and Industry (BCCI) said that his organization is concerned that the proposed budget ignored the opinion of the business community that the formula for determining the minimum wage is wrong. Despite that, BCCI gave its principled support for the SSI budget bill.

Rumiana Georgieva of the Confederation of Employers and Industrialists in Bulgaria (CEIB) said that they would not back the budget because of the proposed increase of the maximum contributory income – “despite the professionalism with which the budget has been prepared”, to use her words.

The Union for Private Economic Enterprise is not supportive either: because they believe that the envisaged pension increase would increase the deficit and because of the increased maximum contributory income.

In the course of the debate, business representatives touched on the need to start paying more attention to the second pension pillar.

The Confederation of Independent Trade Unions in Bulgaria (CITUB) sets two conditions to give its support to the proposed SSI budget: increase of the unemployment compensations and reducing the period during which an employer can declare due pension insurance contributions without actually paying them. 

Other than that, CITUB see “a lot of positive things which deserve to be backed in this budget bill”. 

The Podkrepa Labour Confederation refused to back the budget bill: because of the low unemployment compensations and the poverty line. 

From July 1, 2024, all pensions granted until the end of 2023 will be adjusted by 11% under the Golden Swiss Rule (which provides for an annual pension adjustment by 50% of the previous year's inflation, whether positive or negative, and by 50% of the growth of the average contributory income). An increase is also planned for the so-called widow's supplement for a deceased spouse. From the beginning of 2024, the minimum wage will become BGN 933. An increase in the minimum and maximum contributory income is foreseen. No increase is planned for the benefits during the second year of maternity and for the monthly unemployment benefits.