Bulgaria

The report, Bulgaria: Ensuring Pension System Sustainability Pension Reform Policy Note was written in September 2009. The report states that the Bulgarian pension system... Show More + has undergone significant and well designed reform in 2000-2003. However, attempts to restore financial self-sustainability of the pension scheme were not as successful as envisaged. Projections presented in this note suggest that recently introduced government contributions are insufficient to achieve financial sustainability and introduce growing distortions into the financing system. Additional reforms to the system will be needed to meet these challenges. Among the suggested reforms are; ensuring automatic sustainable pension indexation mechanism free of ad hoc interventions; attempting to further increase effective retirement age by reviewing early retirement rules and eliminating gender differences in retirement ages. A continued slow increase of retirement ages for both genders should also be considered; further strengthen disability certification processes to respond to likely increase in disability claims due to the economic downturn; strengthen long term financial planning, including revision of contribution rates which would be more compatible with long-term fiscal sustainability, and consider an exit strategy for formalized Government contribution to the scheme. Show Less -