MR HASSAN ADEMOV
CHAIRMAN OF
LABOR COMMISSION,
SOCIAL AND DEMOGRAPHIC POLICY
TO THE NATIONAL ASSEMBLY
REGARDING: Bill for Amendment and Supplement to the Social Security Code, No. 554-01-104, submitted by Mihail Mikov and a group of people's representatives
DEAR MR ADEMOV,
In connection with the upcoming consideration of the Bill for Amendments and Supplements to the Social Insurance Code, No. 554-01-104, submitted by the N.P. Mihail Mikov and a group of people's representatives, the Confederation of Employers and Industrialists in Bulgaria, expresses the following position:
With the proposed changes, it is envisaged to stop the increase in the standard retirement age and to maintain the length of service at the levels reached in 2015. It is proposed to increase the contribution to the "Pensions" fund by two percentage points and to increase the contribution to the "Unemployment" fund by 1% to 2 percent, as well as tying the maximum amount of insurance income to ten times the amount of the minimum wage for the country, etc.
The proposals made are in fundamental contradiction with the principled positions of KRIB, related to the improvement of the pension model.
Keeping the retirement age, as well as the required length of service at the levels of 2015, does not correspond to the demographic picture of the country, especially considering immigration. These are good reasons for not supporting this proposal.
We have repeatedly opposed proposals to increase insurance contributions. 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. Proposals related to an increase in insurance contributions without first showing that all measures have been taken regarding the collection and clearing of problems in the system is unacceptable. We are categorically against increasing social security. This is a very bad sign for businesses and investors in the country. The adoption of such measures will encourage the transition to the gray sector and the evasion of insurance contributions.
The proposal related to determining criteria and parameters for the maximum insurance income and tying it to ten minimum wages is also unacceptable. The sharp increase in the maximum insurance income will lead to concealment of income and an increase in the share of the gray economy. No financial analysis has been presented for the effects of such a proposal, as well as reasons for the explicitly fixed 10 MPRs. Cumulatively, this proposal will not achieve the desired effect of increasing collections, while at the same time leading to an increase in pension costs.
The Confederation of Employers and Industrialists in Bulgaria does not support the proposed changes. Our support in principle is only related to the proposal made, related to the possibility of retirement in the absence of the required age. The proposed draft law in general does not correspond to the policy adopted by the social partners for changes in the pension system, which, as a general vision, is presented in the ZID of CSR submitted by the Council of Ministers.
With respect,
Eugene Ivanov
Ex. director
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