Revenue from state-controlled companies should be channeled to the state pension system, said Ivo Prokopiev, chairman of the Confederation of Employers and Industrials in Bulgaria (CEIBG) and publisher of Dnevnik daily and Capital weekly.

Speaking to local newspaper 24 Chassa, Prokopiev said that the only solution that could fundamentally strengthen the first pillar in Bulgaria’s pension system is the transfer of a portion of state assets.

Improved management at state-run enterprises could allow for shifting their revenue to the first pillar, which will set the stage for an expansion of the functions of the Silver Fund, a structure set up to compensate for the extra costs of ageing., Prokopiev said.

In order to play a stabilising role, the fund’s resources should be augmented at least tenfold and the only path to this solution is bringing in top-notch state assets such as national grid operator NEK and Kozloduy nuclear power plant as well as airports, ports, etc.

At the end of August, the Silver Fund had attracted 1.59 billion leva, the bulk of it parked with deposit accounts with the central bank, according to Finance Ministry figures.

But Prokopiev’s proposal raised a brow with Deputy Labour Minister Hristina Mitreva, who said that similar systems all across Europe serve to bridge the shortfall opened by aging population. Therefore accumulated amounts should not be used to finance current pensions but come into play when the demographic crisis ratchets up even further the pressure on public spending.

Daniela Petkova, executive director of pension insurer Doverie, said the idea to use revenue generated by state-owned assets for financing the pension system could definitely help assuage the deficit but declined to make any estimates as to whether they will be enough to bridge it completely. She reckons aging population is a severe issue that needs to be tackled with a special strategy so that the deficit or else the yawning gap will continue to widen.

Source: Dnevnik.bg