PENSION AND INSURANCE REFORM – INEVITABILITY OR POLITICAL PURPOSE

Abstract

For years, the public debate has been focused on the issue of the shortage of accumulated social security contributions in the social security funds of the State Social Security (SSS) and, more specifically, in the Pensions Fund. According to a number of experts, the reason for this is the negative demographic picture, which is resulting in a decrease in the number of people employed in the labor market, the increase in the number of people of retirement age (approximately 2.5 million pensioners), the shadow economy, the low level of social security thresholds - minimum by economic activities and professions and maximum monthly social security income. In parallel with this, the significant increase in the amount of pensions in recent years in absolute terms is manipulatively proclaimed, without indicating their relative share in relation to the growth of income and GDP. In this context, there was talk of another pension reform in connection with the preparation and presentation of an extraordinary convergence report on the admission of the Republic of Bulgaria to the Eurozone. Assurances were expressed to present the necessary analytical calculations and proposals to be provided for public discussion. During the visit of representatives of the ECB and the IMF, a recommendation was made to raise the retirement age, increase social security contributions, and tax reform. Despite the fact that disagreements with these recommendations have been expressed from the parliamentary rostrum, with the preparation of the draft budget of the country for 2026, which is the first budget in euros in connection with the upcoming accession of our country to the Eurozone from 01.01.2026, the Tripartite Council, employer organizations, trade unions and the public are unpleasantly surprised by a 2% increase in insurance contributions to the Pension Fund and an increase in the minimum and maximum monthly insurance thresholds. The reason for this is the lack of public debate, of analytical calculations of how this increase affects the net incomes of employers and employees. The backstage of the development of the draft budget, the lack of access to public information for public discussion by interested persons and structures, disagreement with the members of the Tripartite Council, the quick decisions in the parliamentary budget committee when adopting the autonomous social security draft budget, are rather violations of the principle of transparency and neglect of civil control, characteristic of any democratic society. All this provokes a public debate about the pension reform, questioning its justification, the arguments “for” and “against” this reform. Hence the purpose of the author's scientific research in support of the above arguments for the expediency of the pension and social security reform.