Due to the demographic forecast and the deficit in the pension system, the increase in the pension contribution is included in the medium-term budget forecast. A smooth increase is expected. 1 percentage point in 2027 and another 2 percentage points in 2028, BNT reports.
The retirement age is increasing smoothly. The ultimate goal, according to current legislation, is for men and women to retire at 65. Men will reach it in 2029, and women in 2037.
Nearly half of the money for pensions does not come from social security contributions, but from the state budget. The population in our country is decreasing and aging.
This is the reason why the authorities have requested a new restructuring of the pension system.
Specific proposals are expected by the end of the year. The unions have announced that they would not support increasing the retirement age.
They are "for" increase in pension contributions, but would not support raising the age.
"We are currently in the process of raising the retirement age and from now on, taking a step and continuing on is in no way a good sign for the sustainability of our pension system," said Dimitar Manolov, president of the "Podkrepa" Confederation of Bulgarian Enterprises.
Business wants clear estimates of what the effect of increasing contributions and the retirement age will be.
"We see that age is increasing on people's survival. So, first of all, we would like to encourage people to stay on the labor market and create conditions for people who can and are able to work," added Maria Mincheva, Deputy Chairman of the Bulgarian Industrial Association.
The system should not be reformed piecemeal, experts say.
"To seek solutions that would, on the one hand, guarantee that pensions will continue to grow continuously. That is, to have better adequacy of pensions. And on the other hand, this should not be done at the expense of a deficit in the system, but rather to seek financial stability," commented Zornitsa Rusinova, Chairwoman of ESC.
For this purpose, the gray economy must decrease.
"Many of these people who are in the gray economy do not realize that when it comes time to retire, their pension will be very low," explained Maria Mincheva, Deputy Chairwoman of BIA.
"A big challenge in Bulgaria in terms of the system itself is the demographic picture. And there are many steps that are related to improving the inclusion of young people in the labor market. This is one of the big problems of Bulgaria," added Zornitsa Rusinova, Chairwoman of ESC.
Clear rules for determining the minimum pension are also needed. There is a proposal to tie it to the minimum wage or the poverty line.
"The things that politicians have been doing recently - these arbitrary election exercises have absolutely severed these ties. There are too many pensions for insurance length of service and age, which, according to calculations, turn out to be lower than the minimum pension," said Dimitar Manolov, president of the Podkrepa Confederation of Labour.
A mechanism for determining the minimum and maximum insurance income and transferring all payments unrelated to work activity from the pension to the social system is also recommended by experts. The forecast is that if changes are made to the pension system, they will begin to be implemented in 2027 at the earliest.