26 Oct 2010 / 09:02
Trade unions and businesses have clashed over the government’s plans to transfer some private retirement funds into the public system to secure pension payments for some 100,000 workers.
Boryana Dzhambazova
“It will shake the capital market and it could worsen the business climate,” Vasil Velev, Chairman of the Governing Board of Bulgarian Industrial Capital Association, told Balkan Insight, stressing that the move would not solve any of the existing problems.Trade unions, meanwhile, have voiced their backing for the proposed measures, which they say will allow the government to ensure that workers receive decent early pensions.
“We support the proposal because otherwise many people will be left without decent early pensions,” said Asya Goneva, secretary of the Confederation of Independent Trade Unions. “We want everybody who is eligible for early retirement and wants to retire early to have the right to do so,” she added.
Amid rumours that miners and others may again call strikes over the pension system, the government decided last week to transfer money from private pension funds to the public system in what it says is an effort to ensure that all retirees receive an adequate pension. The government explained that there was a risk that the private pension accounts would not have sufficient funds to make the payments.
“We need to change the model to guarantee decent pensions, otherwise from January 1st people will come and ask us where their pensions are,” Social Affairs Minister Totyu Mladenov said on Monday.
This element of the pension reform will affect around 110,000 people who currently work in harsh conditions- mainly miners, pilots, and metal and chemical workers. Some 7,000-8,000 of them are eligible for early retirement each year, according to trade union data.
The changes are part of a wider effort to fix the Bulgarian pension system, which is heavily indebted and in need of reform. Earlier this month, the government decided it would raise the social security burden by only 1.8 per cent, down from the original 3 per cent, following complaints from business organisations.
balkan insight
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