The contribution to the second pension pillar could be cut in half – from 5% to 2.5%, with part of the funds redirected to state public social security. The proposal is linked to the preparation of the 2027 budget and would affect more than 4 million insured Bulgarians born after December 31, 1959.
Calculations by the Ministry of Finance envisage providing the National Social Security Institute with an additional resource of around €1 billion through the change. However, the specific proposal has still not been presented in a final draft budget bill.
Accumulated funds will not be affected
The plan does not envisage taking away funds already accumulated in individual accounts in universal pension funds. If adopted, it will change the amount of future contributions paid into the personal accounts of insured people.
Thus, for example, with an insurable income of €2,000, €50 per month would be paid into the universal fund instead of €100. The difference would remain in the state public social security system. The exact mechanism and timeframe for any implementation must be set out in the budget bill.
Bozhanov described the idea as partial nationalisation
Bozhidar Bozhanov, co-chairman of “Yes, Bulgaria”, said he had received information about the planned change and described it as an attempt at partial nationalisation of the second pension pillar.
“Another scandalous action by those in power – we have received information that they plan to partially nationalise the second pillar of pension insurance in order to finance the deficit,” Bozhanov wrote.He criticised directing more funds to the state instead of stimulating the economy and capital market. “This may produce a short-term result by plugging holes, but in the long term it means stepping on the gas towards the precipice,” Bozhanov said.
The Ministry of Finance has already presented a draft budget plan for 2027 to the European Commission, but the detailed draft budget containing the specific changes to social security contributions is yet to be published. The official assessment by the European institutions is expected on November 24.
Sources: marica.bg, 24chasa.bg