Pension and Social Security

Bulgarian Industrial Association observes with concern what is happening in the social security system. As part of the tripartite dialogue (between government, employers and trade unions) BIA has repeatedly raised the issues related to the social security system of the country.

BIA reported the following problems in the social security system:

  1. Deformations in applying the fundamental principles of the pension and social security.
    Mixing of financial flows from pensions with those for social assistance.
  2. The alarming trends in employment and demographic status are not reported in a timely manner.
  3. Violation of the principles managing the system - replacing the tripartite principle with state domination.
  4. Deforming of the direct connection between contributions made, the amount of pensions granted and the time-limit for receipt.
  5. Significant problems with the financing of early retirement.
  6. Uncontrolled increasing in the number of Disability Pensions.
  7. There are no economic incentives to increase the contribution to the social security system.
  8. Loss of confidence in the social security system of a large part of the insured.
  9. The share of " the informal sector" in the social security system remains sustainable.
  10. Serious and constantly growing deficit in the state social insurance.
  11. There is no objective information on the state of the social security system.
  12. There are no guarantees for the assets of the insured persons in the pension funds.
  13. The lack of competition between pension funds does not allow to ensure quality service to insured persons.

For this to happen vital reforms in the social security and pension system, Bulgarian Industrial Association suggests:

  1. "Cleaning" of the social security system of all social payments that do not have common with insurance contributions and are with the nature of social assistance.
  2. Limiting the massive abuse of  "Disability pensions".
  3. Modify the conditions of insurance and the right to acquire pension rights of employees in the security, defense and justice (Art. 69 of the CSR), including:

    - Separation of a fund at the State Social Insurance to operates with resources from contributions of employees under Art. 69 CSR.
    - Establish a minimum age for retirement of all military personnel and civil servants under the Law of Ministry of Interior and other special laws.
    - Reclassification of those employed in defense, security and justice by applying differentiated approach depending on the complexity, risk of work done, rank and position, where applicable.
  1. Repealing of work category II and change the criteria for risk and burden of work at  work category I.
  2. To suspend the introduced as a crisis, a temporary measure obligation of employers to pay the first three days of hospital workers.
  3. The state, as an employer, to submit to the State Social Insurance regularly in the full amount of contributions for the respective categories insured persons.