MR IVAILLO CALFIN
DEPUTY MINISTER PRESIDENT
ON DEMOGRAPHIC AND SOCIAL POLICY
MINISTER OF LABOR AND SOCIAL POLICY
AND CHAIRMAN OF THE NATIONAL COUNCIL
FOR TRIPARITE COOPERATION
REGARDING: Submitted for discussion in the NSTS draft law for amendment and addition to the Social Security Code
DEAR MR CALFIN,
In connection with the Social Security Code's enactment submitted for discussion in the National Council for Tripartite Cooperation, the Confederation of Employers and Industrialists in Bulgaria continues to maintain its position regarding the need to prepare a comprehensive package of measures to guarantee short-term and long-term financial stability of the State Social Insurance system.
There are a number of positive proposals in the changes thus proposed. Although the envisaged measures are mostly aimed at improving and stabilizing the system, they represent only a part of the possible solutions. The lack of complexity and completeness of the proposed measures, the absence of a comprehensive model for solving the main problems of the pension model casts doubt on the achievement of the goals set in the reasons for the draft law and the desired effect of the implementation of the individual measures.
KRIB continues to insist that the proposed changes to the pension system must be aimed primarily at measures to prevent the outflow of funds from the system.
In our opinion, the most essential and urgent changes related to the removal from the insurance system of all payments that have the nature of social assistance and have nothing to do with the insurance contribution, limitation of large-scale abuses with the acquisition of disability pensions and restructuring of the system for early retirement.
In the context of the above, KRIB expresses the following position on the bill submitted for discussion:
1. There are no proposals to relieve the system of all non-proprietary payments, such as to pay only pensions for work activity in their actual amount from the "Pensions" fund, all other additional payments to be taken over by the relevant institutions on the basis of an income test - yes a distinction was made between service pensions and social pensions, and social payments were transferred to social assistance.
2. No changes are envisaged in the order, organization and control of the system for determining and awarding disability pensions - changing the methodology and system for issuing certificates by TELK and including legally competent and active doctors at the time of issuing the certificates, experts in occupational medicine, as well as social workers. Accreditation of medical laboratories only, in which it will be possible to carry out research for the needs of TELK.
3. Regarding the restructuring of the early retirement system, there are no proposals that would provide for a review of the professions included in the privileged groups of persons working in the first and second labor categories and for those enjoying early retirement rights from Article 69 of the CSO and their reassessment and application of differentiated approach depending on the degree of complexity of the work.
4. The proposal from our side related to a sharp increase in the required retirement age for those working under the conditions of the third labor category, as well as raising the retirement age for workers in the first and second labor categories in accordance with the increase in the age at third category of work.
5. We categorically cannot support the proposals made to increase the insurance contributions for the "Pensions" fund and the "Unemployment" fund. Although smooth, the projected increase of a total of 4,5% over a period of 12 years is unacceptable. We do not share the notion that increasing the budget or provision is reform. This is another increase, another burden that will be partly borne by businesses in Bulgaria, and the other will be borne by the workers".
6. By supporting the right of the person to freely choose between whether to be insured in the solidarity system of the NSI or wish to use the model of the two pillars - the solidarity and the capital, we support the proposed changes the choice between a private pension fund and the state social insurance to be multiple.
7. We support the proposals made related to: introducing a minimum retirement age for persons under Article 69 of the CSR; introduction of the possibility of granting a pension for social security experience and age in a reduced amount to persons who do not reach 12 months of age and have the required social security experience; removing the possibility of crediting 4 years of insurance experience for 5 years when providing insurance on more than one basis, etc.
8. Regarding the proposal made in 2019, when calculating the individual coefficient, from the formula for determining the amount of the pension, the income of the person on whom the social security contributions were made for a period of three years before 1997 should be omitted, we believe that it should to give the right of choice to the person only to decide whether to respect this insurance income or not.
With respect,
Kiril Domuschiev
Chairman
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