Bulgaria Mulls Upping Bonuses for Working Retirees

Bulgaria's Labor Minister, Toutyu Mladenov, says the Cabinet will up bonuses for people who wish to remain on the labor market after becoming eligible for retirement. Photo by BGNES

Bulgaria's Ministry of Social Policy and Labor is going to propose a plan to increase bonuses for people who are eligible for retirement but continue to work.

The proposal further includes clauses for stronger protection of such people from layoffs.

According to Social Minister, Totyu Mladenov, each year of work after an individual becomes eligible for retirement would be awarded by an additional 4% bonus calculated on the base of his or her current monthly pension, instead of the 3% that are given now.

Mladenov spoke during a conference titled "Demographic Challenges and the Labor Market in the Context of Europe 2020 Strategy."

Last month, however, the Members of the Parliament rejected the proposal of their colleague from the Bulgarian Socialist Party, BSP, and Mladenov's predecessor in office, Emiliya Maslarova, to increase this percentage to 5%.

The current Minister assured that at the moment there is no need to increase retirement age, rather there is one to create incentives for people to work longer years.

Retirement age in Bulgaria now is 63 years for men and 60 for women. The cabinet gave up on plans to increase it, but upped the required years of service to 37 and 34 respectively.

The President of the Bulgarian Industrial Association (BIA), Bozhidar Danev countered that banning the business from firing and dismissing people in retirement age is a direct interference of the government in the labor market. He says the move actually aims to reduce expenses of the retirement system by closing the deficit gap of the National Social Security Institute (NOI) and keep unemployment at its current level.

In the beginning of September, Bulgaria's Prime Minister, Boyko Borisov, strongly criticized Mladenov's statement about possible intentions of the cabinet to raise retirement pensions in the beginning of 2012, prompting the Minister to admit he has given up on such plans and has spoken prematurely without an official decision of the cabinet.

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