True to the pledges given earlier this year by Bulgaria’s socialist-led government, pensions will be increased by another 10 per cent as of October 1 this year.

The increase was one of the amendments to the Public Social Insurance Budget Act, which were passed in Parliament at second reading on September 21. The bill’s passage completes more than a year of a debate on reforms to the public social insurance system, which took place at both political and expert level.

The amendment, in its present form, sidelined the proposals of right-leaning Democrats for Strong Bulgaria (DSB), which for a year insisted that average social insurance contributory income should be the sole factor in pensions adjustments. A DSB request, turned down at Friday’s parliamentary debate, was a 40 leva increase irrespective of the size of the pension. DSB argued that an increase in percentiles would further widen the gap between the lowest and highest pensions. Had the proposal of DSB been passed, the minimum pension would have increased to 133.50 leva.

GERB, the party of incumbent Sofia Mayor Boiko Borissov, took the same stance. At a news conference, on September 19, dedicated to the party’s comprehensive platform the party called for an increase in absolute terms.

The change to the Public Social Insurance Budget Act puts the minimum pension, both in terms of age and contributory experience, at 102.85 leva, an increase from the current 93.50 leva. The minimum pension size will be valid for a three-month term starting from October 1 this year.

The increase is the second large increase for the year and the last before the country’s reversion to the so-called “Swiss rule”. Changes to pensions means 50 per cent of pension increases will be linked to the country’s weighted average annual inflation and the remaining 50 per cent will be pegged to the average social insurance income.

Parliament also endorsed a cut in social insurance contributions of three percentage points. The change will take effect from October 1 this year. In addition, instalments to the Pensions Fund will decrease by a percentage point to 22 per cent and 17 per cent for individuals born before January 1, 1960, and those born after December 31, 1959, respectively. MPs turned down another of DSB’s proposals, which would have meant insurance contributions to the Pension Fund decreasing by six percentage points.

Furthermore, individuals will also have to pay 1 per cent of gross salary to the Unemployment Fund. The change represents a decrease of 2 percentage points.