Bulgaria Reaches Compromise on Private Retirement Funds

Finance | October 27, 2010, Wednesday // 16:25|  views

Bulgaria's Prime Minister, Boyko Borisov, gets ready to meet with representatives of the private retirement funds, the trade unions, the cabinet and NOI. Photo by BGNES

The individual shares of Bulgarian employees eligible for early retirement, held in private funds, will be transferred to the National Social Security Institute (NOI) only for those who can retire in 2011, 2012, and 2013.

The decision was made Wednesday during a meeting between Prime Minister, Boyko Borisov, representatives of the private retirement funds, the trade unions, the cabinet and NOI.

NOI would be paying retirement to miners, pilots, policemen, servicemen, and others eligible to take early retirement until 2014.

Representatives of the private funds admitted this is the fairest decision since the funds do not have enough money to pay decent pensions to those retiring now.

The labor unions say it is a fragile consensus that would last only until 2014, when new measures would have to be added.

The latest decision means that the previously mulled new fund "Early Retirement" within NOI would not be established after all.

Borisov said the problem stems from 10 years ago and from the cabinet of the right-wing leader, Ivan Kostov, because in 2000 it was written in the Social Security Code that in 2011 people eligible for early retirement can retire 8 years before the regular retirement age of 63 for men and 60 for women, but the now effective text says men can retire 11 years earlier and women – 13.

"They tried to keep this in the dark for 10 years, but I want miners, divers, and pilots to know that the legislation passed by Kostov means that they must work for another 3 years. They all waited for my party to take office to make us responsible. But it would not happen," the PM stated.

Talks are continuing Wednesday to decide how to make the transfer in practice.

This could, however, end up not being the final decision since the business was not represented at the meeting.

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Tags: Social Security Code, National Social Security Institute, NOI, Prime Minister Boyko Borisov, retirement reform, pension fund, retirement funds, IMF, International Monetary Fund, pension accounts, private funds, Ivan Kostov, early retirement


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