Банкеръ Weekly

Briefs

THE BUDGET WILL ALLOCATE ALMOST BGL1BN TO SOCIAL INSURANCE

The deficit of the Pension Fund will be covered by a transfer of BGL516MN from the State budget next year. This amount was approved by the Council of Ministers, which voted on November 8 teh draft bill on the budget of the State Social Insurance (SSI) for the year 2003. As a result of the pension reform, launched on January 1, 2000, and due to the Government's policy for reducing the aggregate taxation and social insurance burden, the fund will be in the red till 2007-2007. Only after that it could stabilize financially, Yordan Hristoskov, Head of the National Social Insurance Institute (NSSI) explained.The Pension Fund's deficit at end-2002 is pre-estimated at BGL216MN, to be covered by an additional subsidy from the Treasury, Mr. Hristoskov added. The deficit is due to unrealistic evaluations of proceeds for SSI, as when its 2001 budget was drfated the Finance Ministry had submitted to the NSSI an incorrect macroframe, the Minister of Labour and Social Policies Lidiya Shouleva commented. But the calculations for SSI in 2002 are in compliance with the macroframe of the State budget.The Treasury will transfer to social insurance another BGL476MN, but it is not a subsidy to the Pension Fund. The money is earmarked for payments that are by law the State's obligation, but are effected by the NSSI. This amount will cover the expenses for social and additional personal pensions, allowances for children, and all one-time financial assistance for child-birth and maternity. The State budget will also allocate to the NSSI money for the health insurance of retirees. Thus, the aggregate amount of teh transfer from teh Treasury to public social insurance will amount to BGL992MN.However, the huge amounts that will be circulating in the Pension Fund next year, will become pretty modest when distributed among individual receivers. In 2002 retirees will be getting on average BGL6 per month up from this year. The average pension will reach BGL101 in 2002, up from the present BGL91, the calculations in the draft budget for the SSI show.

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