Parliament Passes Pension Insurance Changes amid Bitter Disputes

Social Policy Minister Ivaylo Kalfin (C) warned lawmakers they were treating the issue as if it were about "one's personal budget'. Photo by BGNES

Bulgarian lawmakers have narrowly approved changes to the pension system comprising various aspects of pension insurance.

Legislative amendments were passed with the votes of the main ruling party Citizens for European Development in Bulgaria (GERB), the third-largest electoral force Movement for Rights and Freedoms (DPS) and part of Bulgarian Democratic Center (BDC) MPs.

According to the proposed changes, people entering the labor market for the first time will have the right to choose, but it will be a one-off privilege.

If one chooses to contribute to National Insurance Fund (NOI) then it will be not possible to switch to a private pension fund, while this change is possible if contributions are made to a universal pension fund.

Another proposal envisaged that those born after 1959 who already have opted to make their contributions to a private pension fund will have to reaffirm their choice within a short period of time, otherwise their contributions will be automatically transferred to the solidarity fund of the National Insurance Fund NOI.

The Reformist Bloc (RB), GERB's junior coalition partner, has accused lawmakers of "making use" of the absence of Prime Minister Boyko Borisov (the de-facto backbone of GERB), who is currently in Brussels for a European Council Meeting, to rush through the legislation.

Socialists, who are now in opposition, have for their part alleged that GERB is in a tacit alliance with the DPS, a partner to the socialists in the former elected government often blamed for the previous cabinet's resignation.

The two basic coalition partners have repeatedly clashed over the pension-system reform in the past few days, with the RB fervently objecting to most of the proposals.

Reformists have even warned the move could potentially put the coalition in jeopardy.

The other government-related party, left-wing Alternative for Bulgarian Revival (ABV), which also has a minister in the government, is not supportive of the draft legislation.

Social Minister Ivaylo Kalfin, from ABV, even declared "one could not work like that" after the vote, claiming GERB MPs were approaching the issue as if they were discussing "one's personal budget".

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