THE BULGARIAN INDUSTRIAL ASSOCIATION HELD A PRESS CONFERENCE TODAY ON THE PENSION SYSTEM REFORM DURING AN ECONOMIC CRISIS

Pension System Reform during an Economic Crisis

General Provisions:

1. There is no pension system which cannot be affected by the crisis.

2. Lessons from the crisis: the GDP decrease leads to a decrease in the revenues of the Social Security Funds.

3. The Pension System was in a state of crisis way before the economic crisis occurred.

4. The crisis affects the three social security pillars at a different time and to a different extent.  

5. The stable revenue reduce is a direct consequence of:

• Reducing the contributions amount with two points in 2010 and intending to reduce it with three more points by 2013;

• Reducing the number of employees;

• Reducing the income in the real sector and keeping the budget sector remunerations idle;

• Growth of the grey sector;

6. The stable expenditure increase is a direct consequence of:

• Exerting expected pressure to retire, including the unrealistic rising of invalidization rates;

• Stable increase of the expenditure for unemployment compensations;

• 10 percent possible increase of the pensions during the second half of 2010;

• Obliteration of the pension ceiling in 2012;

• Intending to equal the minimum pension with the poverty line;

7. Balancing the revenue - expenditure ratio of the Social Security and Pension Funds could only be done by an increasing state budget subsidy, which is not an easy task at a time of an economic crisis.