Government Claims No Nationalization of Pension Funds

Government Claims No Nationalization of Pension Funds

Bulgaria's government has sought to assuage fears that its planned measures for pension reform amount to a nationalization of private retirement funds.

The government has suffered severe criticism on part of the business sector, the major bone of contention being its intention to transfer money from the early retirement accounts in private funds to a newly set-up state "early retirement fund."

Bulgaria's Labor Minister Totyu Mladenov and the head of the National Social Security Institute Hristina Mitreva presented Monday the final draft of the planned amendments to the Social Security Code. The changes are to be discussed by the Board of the Institute on Tuesday, and then by the National Council for Tripartite Cooperation, including the trade unions and the business association.

"The individual accounts in the professional retirement funds do not come from the personal installments of the employees. They were made by the employers who calculated these expenditures in the value of their products and services. Therefore, we have all contributed to those accounts," Mitreva said seeking to explain why the transfer of early retirement accounts from professional pensions funds to the National Social Security Institute does not amount to nationalization.

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