Bulgaria FinMin: Could Private Funds Pay Normal Pensions?

Bulgaria's Finance Minister, Simeon Djankov, has stated he was waiting on answers from the private pension funds on whetehr they are able to pay normal early pensions. Photo by BGNES

Bulgaria's Finance Minister Simeon Djankov has announced he was still waiting for pension funds to say whether they would be able to pay early pensions to people.

Djankov has stated that the funds had to announce whether they have had good investment policies and whether they could provide people with the needed early pensions.

Bulgarian Labor Minister, Totyu Mladenov, and the director of the National Insurance Institute (NOI), Hristina Mitreva, presented Monday amendments to the Social Security Code.

According to them, the insurance contributions of workers in the first and second category of work will be put into the account of the newly created fund to NOI, "Early retirement," starting from January 1, 2011.

From 2000 until now, the contributions were put into accounts of professional retirement funds. Starting next year, these funds will be used for paying the early pensions until workers reach the general retirement age.

The first early pensions are expected to be transferred in March 2011.

The proposed amendments will be reviewed Tuesday by the Supervisory Board at NOI. On Wednesday the review will be conducted by the National Council for Tripartite Cooperation and by the Council of Ministers.

However, in an interview for the Bulgarian private TV channel bTV on Tuesday, Djankov said that if the private retirement funds start paying good pensions from January 1, 2011 and if they have had good investment policies, then the money, accumulated in them will not be given for management of NOI.

"But if this is not so, then we will need new policies and a new holder of the account, who will manage it," he said. 

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