Poor demographic and economic situation in the country threatens the financial stability of the state social insurance sector, and not only in the long run. An analysis of the National Social Security Institute (NSSI ) shows that the Prime Minister Oresharski’s measures to freeze the increase of length of service and retirement age as of 2014 would have a detrimental effect on the functioning of the social security system. NSSI said that because of the progressive reduction of the country’s population, high unemployment and increasing the share of retirees, combined with weak revenue collection and a significant share of the informal economy, the system is now in critical condition. According to experts from the institute the Pension Fund already has problems financing even the current low pensions.
One of the main problems is that most people stop working long before the statutory age. Now it is 60 years and eight months for women and 63 years and eight months for men in the most massive third category of labour. In 2012 the average age of new retirees was 56.2 years. Even earlier retire employees of the Ministry of Defense and the Interior Ministry – at an average of 49.7 years. Receivers of disability pensions due to sickness are also below 60 years on average while those who stopped working after a workplace accident or an occupational disease the age does not even reach 48 years.
The lowest pensions are for the oldest people, suggesting that the mechanisms for updating and indexing pensions fail to guarantee that people’s incomes will not be left behind inflation. People over 95 years now take 193.98 levs in monthly pensions on average while those between 85 and 89 get 209.95 levs. The monthly average for all pensioners is 271.21 levs. Those who worked in the uniformed services get on average 467.61 levs, which far exceeds the minimum work wage.
In 2012 and the value of the cash benefits paid for unemployment continued to increase, reaching 353.8 million levs. This exceeds by 4.6 million levs the anticipated sum in the budget of the state social security. Calculations have proved inaccurate, since no one has planned the influx of people to register in labour offices. Last year they were 364,536 people. Most often from the welfare money benefit people at the age of over 55 who have difficulty returning to the labour market once they lose their job. Although seemingly effective and well-backed financial measures and programmes for unemployed youth employment for those u to 19 years old increased by 24% in just 12 months. Among young people it is a common practice to work in the informal sector and to accept offers of part-time and temporary jobs paid in cash and no contracts. If the length of service is considered, the most unemployed those with experience of up to three years, while those with rich work experience are most difficult to retrain.
The BANKER
