Position of KRIB, regarding proposals of the nationally representative employer organizations for the development of the pension system, for financial sustainability, reduction of abuses and adequate amount of pensions

           AIKB BSK BTPP KRIB

Proposals of the Nationally Representative Employer Organizations

for the development of the pension system, for financial sustainability, reduction of abuses and an adequate amount of pensions

Nationally representative employer organizations declare support for the following main proposals:

Preservation of the three-pillar model of the pension insurance system.

Distinction between the nature and scope of insurance payments and those which are of a social assistance nature. On this basis, the insurance system should be "cleaned up" once and for all.

Radical change of the system for determining and awarding disability pensions and the medical examination of working capacity in order to prevent abuses and limit the deficit in the funds of DOO.

An increase of 6 months per year in the retirement age for the III labor category for both sexes up to 65 years and in the insurance length of service up to 37 years for women and 40 years for men.

The income and expenses for the insured persons under Art. 69 shall be allocated to a separate fund of the LLC.

Cancellation of the II category of work and change of the criteria for risk and burden of work for the I category of work.

Based on a decision based on these proposals, the necessary actuarial calculations were carried out and the following additional steps were taken:

1. Changing the distribution of 50/50 between insurer and insured persons and preserving the current amounts of insurance contributions on the basis of a subsequent impact assessment when adopting the NPRO proposals.

2. The minimum insurance income for agricultural producers should be gradually equalized with the minimum insurance income for self-insured persons.

3. In the provision of Art. 4, para. 1, item 1 of the Social Insurance Code to regulate the insurance of all persons working under an employment relationship.

4. To introduce a personal insurance contribution for civil servants and for employees of special departments.

5. To suspend the obligation of employers to pay the first 3 days of sick leave to the employee introduced as an anti-crisis, temporary measure (Art. 40, Para. 5 of the Labor Code) and to restore the previous situation.

6. NPRO do not support the proposal to double the limitation period under Art. 109 of the Code of Civil Procedure (related to tax obligations), excluding the application of para. 1 regarding the initiation of the proceedings to establish public claims for insurance contributions.

7. NPRO does not support the proposal to restore the provision of para. 3 in Art. 355 of the Code of Civil Procedure, according to which an official who charged, did not charge and/or authorized the payment of remuneration without having paid the social security contributions due for them, is punished with a fine in the amount of the unpaid social security contributions, but not more than BGN 20 In para. 000 of the cited provision, the liability for persons who fail to comply with the provision of Art. 1 of the CSR, determining the procedure for paying the insurance contributions.

8. NPRO proposes the cancellation of the introduced criminal liability for officials who avoid the establishment or payment of mandatory insurance contributions and will initiate steps for referral to the Constitutional Court by the entitled persons and institutions.

9. Limiting employment to the required minimum length of service for high-risk occupations for the I category and canceling the retirement conditions for the II category of work.

10. To introduce a socio-medical assessment for persons who have reached the age according to Art. 68, para. 1 of the Social Security Code, with a view to exercising rights under other normative acts.

11. To optimize the capacity of the bodies of medical expertise (TELK and NELC), to increase the effectiveness, efficiency of the structure, functions, departmental affiliation of the control, using the experience and prevailing practice in the EU.

12. The individual coefficient under Art. 70 of CSR to be defined as the arithmetic mean of the monthly individual coefficients.

13. Dropping the three best years before 1997 when calculating the individual coefficient, at a later stage and only for the newly granted pensions.

14. NPRO does not support the proposal to introduce an annual official recalculation of pensions for acquired insurance service and insurance income after retirement, and the current regime should be preserved - at the initiative of the person.

15. To cancel the possibility of crediting 4 years of insurance experience for 5 years when providing insurance on more than one basis.

16. The measures that provide for the payment of "Christmas" and "Easter" supplements to pensioners are supported, as there is no explicit obligation in CSR and it is applied in case of current over-implementation of the state budget.

17. NPRO supports raising the ceiling for the maximum amount of one or more pensions received from 35 to 40 percent of the maximum insurance income from 2016.

18. When determining the amount of monetary compensation for temporary incapacity due to general illness, occupational accident or occupational disease and monetary compensation for pregnancy and childbirth, the condition according to which the daily monetary compensation cannot exceed the average daily net remuneration for the period of which it is compensation calculated.

19. It is mandatory to introduce a minimum age requirement for all military personnel and civil servants under the Law on the Ministry of Internal Affairs and other special laws, applying a differentiated approach depending on the degree of complexity, risk of the work, rank and position where applicable.

20. NPRO offers indexation according to the Swiss rule of the effective amount of the maximum insurance income in two years with an applicable coefficient two years earlier compared to the current year (example - first indexation in 2017 with a coefficient from 2015, second indexation in 2019 with a coefficient from 2017 etc.).

21. NPRO supports the introduction of a choice for individuals between two schemes for acquiring the right to unemployment compensation, regardless of the chosen option:

- acquisition of the right to compensation under the current conditions;

- the person acquires the right to cash compensation for unemployment, if insurance contributions have been paid or are due for him to the "Unemployment" fund for at least 12 months during the last 24 or 36 months before the termination of the insurance. If the person chooses this option, the amount of the benefit is fixed and is paid over 6 months.

23. NPRO do not support the proposal of the long-term unemployed (more than 1 year) who are two years before the age under Art. 68 to receive cash compensation/unemployment assistance in a minimum amount for a period of 12 months. Alternatively, flexible retirement can be introduced - a scheme for early retirement with a reduced amount of the pension and missing insurance service, with the reduced amount fixed at a specific number for each missing month of service.

22. NPRO supports the possibility for licensed PODs to establish and manage a voluntary fund for unemployment and/or professional qualification.

23. In the event of a delay by the National Revenue Agency in transferring funds for the Social Security Act to the universal pension funds, the legal interest on the delayed sums shall be charged and paid to the insured persons, providing for a sanction for an official in case of non-fulfilment.

24. Introduction of a multi-fund system in the second and third pillars of the pension system, including:

– conservative, balanced and aggressive portfolio;

– a centralized fund to cover the differences between the net amount of the insurance contributions received and the available funds for the individual lots;

- reduction of current fees and deductions.

25. When acquiring the right to a pension, the insured persons in the UPF and PPF can choose between the payment of a lifetime pension, a term pension or a one-time or deferred payment of the entire amount accumulated under the individual lot upon creation of a guarantee pool.