Bulgaria President Won’t Veto Contentious Change to Pension Legislation

Bulgaria's President Rosen Plevneliev. Photo BGNES

Bulgaria’s President Rosen Plevneliev said on Saturday he wouldn’t veto a controversial amendment to the pension insurance model that makes mandatory contributions to private pension funds optional.

“The government has pledged to be open to a nationwide debate by the end of March next year, to invite experts, employers and unions and everyone else who could contribute to a sustainable pension reform in Bulgaria,” Plevneliev told Darik radio station.

“[The pension reform] cannot be delayed but it also cannot be made in a piecemeal mode and at the last moment,” the President said, referring to complaints from politicians, employers and financial analysts that the change to Bulgaria’s pension insurance model was rushed through parliament without proper consultations and could threaten the stability of the minority coalition government and the country’s private pension funds and capital market.

“The government itself has set a 31 March 2015 deadline to make a comperehensive pension reform,” Plevneliev said. “If this fails to happen, then I’ll change my position.”

The Reformist Bloc, the junior partner in the minority coalition government led by GERB party, rejected the change but stopped short of saying it would leave the coalition.

The nationalist Patriotic Front and the leftist ABV party, which have separate agreements with GERB to support the government on certain issues in parliament, have also rejected the amendment.

The Reformist Bloc late on Friday urged Plevneliev to veto the controversial legislation that opens the door for the transfer of mandatory contributions to private pension funds paid by employers and workers to the state pension fund which has been in the red for years.

The move is seen by its opponents as an attempt by GERB to plug a hole in deficit-ridden state pension fund at the expense of private pension finds. GERB has denied this was the motive behind the change, saying it would give workers and employers an option to choose between the state pension fund and private pension funds.

Prime Minister and GERB leader GERB Boyko Borisov said on Friday the contentious change to pension insurance legislation could be withdrawn if coalition partners convinced him that it was ill-considered.

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