Bulgaria: Pension Boost Restored After Backlash Over Reduced Increase

The Bulgarian government has decided to increase all pensions starting July 1, applying the full Swiss rule, as confirmed by Denitsa Sacheva following a meeting of the Joint Governance Council. The decision, which will be reflected in the final version of the budget submitted to the National Assembly, aims to maintain the 3% budget deficit while keeping Bulgaria’s eurozone accession a priority.

Sacheva emphasized that the move was necessary due to rising tensions fueled by misinformation. She stated that the ruling coalition remains united and is confident that the proposed budget will secure broad support among the government’s participants. She also pointed out that opposition forces, having previously engaged in populist policies while in power, are now doubling down on their approach in opposition.

The Swiss rule, introduced two decades ago to ensure pension adjustments are based on economic indicators rather than political decisions, dictates that pensions increase by a formula of 50% inflation growth and 50% growth in social security income. However, an earlier proposal from the government suggested modifying this formula to 80% inflation growth and only 20% growth in social security income, resulting in a significantly lower pension increase.

Initially, pensioners were expected to receive an 8-9% increase based on the Swiss rule, but the new proposal suggested cutting the increase to just 5%. This sparked criticism, particularly from “We Continue the Change - Democratic Bulgaria” (WCC-DB), which condemned the government’s approach and announced they would not support the budget during its first reading.

The initial announcement of a lower-than-expected pension increase led to frustration, as pensioners had been assured of a higher adjustment. The matter has become a key issue in the ongoing political debate, with opposition parties arguing that the government’s approach undermines the long-established principles of pension indexing.