Parliament's decision to increase pensions by 11% is a bit strange. I don't know how to comment on it outside of the context of the election campaign right now.
This was stated in an interview with the BNR by Maria Mincheva, chairperson of the Supervisory Board of the National Institute of Social Sciences and vice-chairman of the Bulgarian Chamber of Commerce.
"Because the law has clearly laid down how decisions are made and by which authorities. This decision was made within the framework of the legal procedure, every year the Supervision of the National Institute of Social Sciences makes such decisions. If we accept that the NA has the right to operationally intervene in the activities of any bodies that are collective, this decision would have no value, because the supervision is done in such a way that there is parity between the quota of the government and the social partners. This decision can only be commented on during the election campaign. "Unfortunately for me, the issue of pensions is used pre-election by political parties as there are over 2 million pensioners who are voters and politicians like to hand out money from the rostrum of the National Assembly, hoping it will attract more votes one way or the other." commented Mincheva.
"The rule is also changed from 75% of inflation and 25% of the growth of the insurance income, since 2005 this decision is tied to 50% growth of the insurance income and 50% of the growth of inflation. According to the law, pensions are updated annually with a decision of the NIO with a % equal to - the rule is applied, and it is not said at the discretion of the supervisor, there is a clear rule", explained the chairman of the Supervisory Board of the NIO.
And commented:
"There is nothing reprehensible in the fact that the head of the National Institute of Social and Economic Affairs presents a proposal to modernize pensions, because the law clearly states 50% of the growth of social security income and 50% of the growth of consumer prices."
Maria Mincheva warned that we live in uncertain times, referring to the current geopolitical situation and "forecasts show a decrease in inflation growth".
For her, the big problem "is long-term and not talked about – population aging".
"Fewer and fewer people will contribute and more and more will be the beneficiaries of social security. We have heard calls for the need to increase social security contributions in order to overcome the deficit in the National Social Insurance Institution. But no matter how much the contributions increase, we must look at the pension system in a more complex way," Mincheva said.
"For us as an employer organization, this is an element that needs to be clearly stated, to see where pensioners can receive income outside of the state pension. Secondly, efforts should be made to increase the financial literacy of young people. And by increasing financial literacy, we should know that today, by paying insurance on our real income, and not on the minimum, this guarantees us a dose of peace in the years when we will not be active", recommended the Chairman of the Supervision of the National Insurance Institution.