CITUB calls national protest against changes in conditions for retirement
The Confederation of Independent Trade Unions in Bulgaria (CITUB) held a national protest on 7 October 2010 against the government’s proposed changes to the pension system. Unions are particularly opposed to plans to extend the necessary contribution period by three years, and the lack of consultation. Nearly 15,000 union members, citizens, pensioners and students gathered for a rally at the headquarters of the Confederation, then marched to the National Assembly.
Impact of proposed changes
The government’s proposal to extend the pension contribution period by three years was the main cause for the union protest, which took place while the bill was being discussed in parliament. Unionists are protesting at the manner in which the government adopted the amendments at its meeting on 4 August and submitted them to parliament without consulting its social partners.
According to the Confederation of Independent Trade Unions in Bulgaria (CITUB), the proposed changes undermine the acquired rights of Bulgarian citizens and do not solve the problems of the pension system. The new act lays the entire burden of the financial rebalancing of the social security system on working people. The unionists were protesting against:
- increasing contribution periods for all Bulgarian workers by three years, from 37 to 40 for men and from 34 to 37 for women;
- a three-year increase in the minimum required number of years of contribution from 12 to 15. This means men reaching age 65 and women reaching age 60 can retire with insufficient years of service, but only if they have worked for at least 15 years;
- a two-year increase in the retirement age for workers in category I and category II professions, such as miners and heavy vehicle drivers; it rises from 47 to 49 for women, and from 52 to 54 for men in category I, and from 52 to 54 for women and 57 to 59 for men in category II;
- a three-year increase in the number of required years of pension contributions for workers in defence, security and similar departments, as well as a three-year increase in the minimum number of years required for retiring teachers, from 25 to 28 for women and from 30 to 33 for men.
Trade unions’ opinion
According to trade union experts, the stabilising effect of these measures on the Pension Insurance Fund will be minimal, but the consequences for access to pensions for all categories of employees will be severe. In preliminary discussions with the government and public, the unions asked instead for better employment conditions for older and younger workers, protection for people of retirement age, increased social insurance contributions to stabilise the welfare system and an extension of periods out of service that can be counted towards a pension – including disability, military service, maternity leave, training and some categories of unemployment. The unions also asked for more gradual reform, accompanied by increases in the rate of income replacement.
Employers’ associations generally support the changes. In a special statement on the changes to the Social Security Code, the Bulgarian Industrial Association (BIA) said most of the proposals were timely because of the need for urgent reforms to minimise further financial drain and rebalance the social security system. The statement expressed support for increasing the required number of years worked to qualify for a pension by three years. It also welcomed the introduction of incentives to postpone retirement, by increasing the coefficient for each year of pension contributions after the defined pension age – from 1.1% to 3% in the formula, determining the amount of pension. According to BIA, more radical changes are needed, which have already been agreed by the social partners, including:
- removing from the social insurance system all payments that are not linked to individual social security contributions (for example, pensions for farmers and social pensions);
- equalising the status of insured persons in private and public schemes;
- introducing personal contributions for civil servants (employees in administration, judiciary, police and defence are currently insured entirely by the state budget);
- removing restrictions on the maximum amount that can be paid into a pension fund and differentiated rates for minimum insurance income for various categories of self-insured workers.
The trade union protests were intended to force the government to withdraw the proposed law between its first and second readings in the National Assembly and to start immediate tripartite negotiations on the content and deadlines for implementing pension system reforms. CITUB announced several forms of protest:
- a petition to parliament supporting union demands collected in designated places throughout the country;
- one-hour warning strikes in certain industries (for example, mining and transport);
- a national rally in Sofia, starting at CITUB headquarters and culminating in a protest rally outside the National Assembly.
Reforms of the pension system over the past five years have repeatedly pitted the unions against the government, but now CITUB has declared the situation intolerable. The previous three governments have implemented a continuous policy of decreasing mandatory social insurance contributions. According to trade unions, it is this that has led to the financial collapse of the pension system. Between 2000 and 2010, the rate of contributions fell from 32% to 16%. In order to improve the collection of social security contributions, CITUB has repeatedly demanded that employers who fail to transfer contributions should be prosecuted and fined, but these proposals have always met with open disapproval on the part of employers. Independent legal experts have also warned that the Bulgarian constitution does not define the payment of health and pension insurance as a citizen’s duty, unlike the payment of taxes, and therefore non-payment cannot be prosecuted on these grounds. In 2000, a change in the Penal Code attempted to criminalise non-payment of contributions by employers, through a penalty of up to three years in prison, but the Constitutional Court declared this provision unconstitutional.
Lyuben Tomev, Institute for Social and Trade Union Research (ISTUR)