There are 2,169,000 retired people in Bulgaria and 1,227,000 of those or more than 50% will receive the symbolic Easter bonus of EUR 20, as their pensions are lower than the poverty threshold of EUR 160 per month. The sum is not impressive at all and it could hardly have any significant impact on the monthly budget of any pensioner. On the other hand this comes to demonstrate the state’s social commitment.

Many developed countries consider retired people to be privileged persons, since they don’t work, but receive pretty good pensions. There are even states where the retirement pension is bigger than the last salary received. To sum up, retired people across the developed world live a good life and are seen as a major factor within the so-called Silver Economy.

Eurostat data shows that 1 hour of labor in Bulgaria brings to the employee an average of EUR 5.1 on an average of EUR 25.4 for the EU. The gap gets cosmic in terms of pensions. Bulgaria’s lowest pension is EUR 100, while the highest one cannot exceed EUR 460. Even neighboring Greece with all of its economic collapses has a minimum retirement pension higher than the highest one in Bulgaria. Europe considers EUR 1,300 for a normal pension, while the average one for Bulgaria is EUR 170.

However, the low pensions issue has its reverse side. We are talking about the funding sources of these pensions. In Bulgaria those are paid by pension funds, just like everywhere else in the world. The National Social Security Institute /NSSI/ is the largest one in this country. It collects the installments, it pays the pensions. There is a second and a third pillar of social security. The second one is mandatory for those born after 1960 and hasn’t started to pay pensions yet. The third one is voluntary and there are no limitations here. However, for the moment all elderly people rely on the state-owned NSSI. At the same time it has turned out that this institute’s financial resources are pretty limited and it cannot allow greater generosity. It’s just that the installments are that low and there is no money for higher pensions. That is why nearly 50% of the pensions are funded directly by the state budget. Hence the governmental decision on the bonuses of the elderly people: the EUR 25 mln. for those humble holiday bonuses will come from the treasury.

The demographic crisis that the state has been going through for decades adds more to this complicated situation. Death rate in Bulgaria is highest, compared to the other EU member-states. At the same time the relative share of elderly people has been constantly on the rise, since the number of newly born children declines and many of the active employees just migrate, in order to make a living abroad. This endangers the social security system, as it is based on the principle of solidarity and less and less people tend to pay their installments, while a growing number of Bulgarians rely on the social pension for old age. Social Minister Biser Petkov has tried to calm down the spirits by claiming that the system will be stable till 2037 – 2040. At the same time he has promised a 3.8% update of everyone’s pension on 1 July 2018.

To sum up, EUR 20 for Easter is not that much money, but at least comes to show some concern on the part of the state.

English version: Zhivko Stanchev