BIA’S PROPOSAL ON CHANGES IN STATUS AND REVENUE SOURCES OF THE SILVER FUND

Bulgarian Industrial Association has sent a letter to the Minister of Finance and the Minister of Labour and Social Policy expressing its proposals for changes in status and revenue sources of the State Fund for Guaranteeing the Stability of the State Pension System, as follows:

“In connection to the resumed debate on the future of the Fund for Guaranteeing the Stability of the State Pension System - the so-called "Silver Fund" (SF), BIA presents the following proposals:

1. The SF should continue to operate as a reserve of the state pension system by extending its revenue base and reviewing the terms and procedures for transferring of funds to fund “Pensions” and fund “Pension for the persons under Art.69” of the SSC. In this way they will receive, though it being partial, a solution to the problems related to the so-called “right of choice” for persons insured in a universal pension fund and a professional pension fund in order to finance the additional costs of public social security from the realization of these rights.

2. It is necessary to regulate and ensure regular and more significant receipts in SF, including by regulating the following additional revenue sources:

• accumulation of surpluses from charges levied by state institutions over the actual costs for providing the relevant public services;
• the entire amount of all privatization proceeds, not just the part “accounted on the state budget”;
• reimbursement from the state budget of the deviated revenues to the State Consolidation Company from the privatization of shares and shares of state-owned enterprises;
• initiation of active management of SF funds, incl. through the conclusion of an agreement between the Ministry of Finance and the Bulgarian National Bank insofar as no contract with a first-class international asset manager of the external financial markets has been concluded so far, as stipulated by the current legislation.

3. It is necessary to restructure the management of the SF, which should be transformed into an Agency to the Ministry of Finance (or a sovereign state fund) to manage the total assets and liabilities of the state, including in connection to the active government debt management, by discussing and drafting relevant legislative changes.