Bulgaria to Rescind Limitations on Maximum Pension Amount

Domestic | September 18, 2009, Friday // 10:31|  views

Iordan Hristoskov, former Director of the National Insurance Institute, believes eliminating pesnsions' amount restrictions in Bulgaria is the right move. Photo by BGNES

The retirees' pensions in Bulgaria will no longer be limited to the maximum of BGN 700, beginning January 1, 2010.

For the first time since the introduction of the Pensions Reform 9 years ago, Bulgarian retirees will be able to receive pensions higher than BGN 1 000, Iordan Hristoskov, former Director of the National Insurance Institute, believes.

The average pension in Bulgaria is now BGN 289, but people, who have paid maximum insurance contributions since 1997 will be able to receive 4,5 times more than that amount.

Hristoskov qualifies the measure as the right move, adding it would not crash the retirement system and deepen the deficit.

The elimination of the pensions' maximum amount restriction is the right move, Bulgaria's Social Minister, Totyu Mladenov, on his part, declared in an interview for the TV channel bTV.

Mladenov said the measure was the only way to encourage people to pay insurance based on their real salaries.

The BGN 700 maximum restriction was introduced in Bulgaria to counteract flaws in the retirement system allowing huge discrepancies between different pensions' amounts.

The restriction, however, will remain in effect for older pensions, while in July 2010, the cabinet has intentions to revise this provision as well.

 

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Tags: Iordan Hristoskov, National Insurance Institute, Totyu Mladenov, pension

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