Bulgarian Cabinet Puts Off Pension Reform for 2015

The Bulgarian Social Policy and Labor Minister, Totyu Mladenov, accuses the business of failing to fulfill their commitments such as increased revenues and new job openings. Photo by BGNES

All but one Bulgarian employers' associations (the Confederation of Employers and Industrials in Bulgaria (CEIB), and the labor unions reached an agreement to increase the social security payment by 2 percentage points from January 1, 2011.

The information was reported late Sunday by Finance Minister, Simeon Djankov, upon conclusion of the informal talks between the business, the unions and the cabinet.

After heavy, three-day long debates, it became clear the retirement reform will be postponed to 2015, over pressure from trade unions, who insist on a very gradual increase of the number of years of service, required for retirement. The talks are set to continue Tuesday with Djankov saying his experts must first find out if “the ends would meet” with the 2 points increase instead of the previously mulled 3 percentage points.

CEIB say the negotiations have been a “grotesque” and they continue to firmly oppose any upping of social security payments. Other business organizations, the Bulgarian Industrial Association, for example, state they would return to the Three-Way Council between them, the cabinet and the labor unions under certain conditions such as insisting that everyone takes on the burden of the reform, including the army, the police and the judicial system, who currently do not make social security payments.

Last Wednesday, the associations of Bulgarian employers announced their unanimous resolution to leave the Three-Way Council, made on the heels of the cabinet's Tuesday decision to up payments for social security upon retirement by 3 percentage points in a bid to relieve the country's strained health care system.

The labor unions continue to ask to not increase the years of service and to threaten with new mass protest against the reform.

The Bulgarian Social Policy and Labor Minister, Totyu Mladenov, assessed the talks as successful over the fact the business joined the negotiation table again, adding the cabinet is willing to compromise – to increase a “little bit” the social security payments in order to stabilize the retirement fund, and to gradually increase the years of service and retirement age.

Mladenov declared a consensus has been reached on the above, a statement later denied by CEIB.

The Minister accused the business of failing to fulfill their commitments after the cabinet of the center-right Citizens of European Development of Bulgaria (GERB) party reduced the social security payments by 2 percentage points in the beginning of their term; commitments such as increased revenues and new jobs.

Bulgaria’s Prime Minister, Boyko Borisov, said the labor unions have been willing to compromise even more than the cabinet, but asked the latter to explain to people the grave consequences from the delayed, on their insistence, retirement reform.

We need your support so Novinite.com can keep delivering news and information about Bulgaria! Thank you!