Bulgarian Pensions: Proposed Adjustment to 10% from Initially Planned 11%

The scheduled increase in pensions from July 1 might be adjusted to 10% instead of the initially projected 11%, in line with the State Social Security budget for the current year. This potential alteration stems from the officially reported lower inflation rates compared to earlier forecasted estimates.

According to information from BNR, this proposal is outlined in a draft decision of the National Social Security Institute's Supervisory Board, with a scheduled meeting set for May 14. The adjustment mechanism for pensions granted until December 31 of the preceding year follows the so-called Swiss rule, which entails a percentage derived from a combination of inflation growth and the average insurance income.

The Budget of the State Social Insurance for the ongoing year had initially factored in an 11% increase in pensions from July 1, 2024. This calculation was based on data from the Ministry of Finance's macroeconomic autumn forecast, assuming a 12.9% rise in the average insurance income and a 9.1% annual average harmonized consumer price index.

However, the National Social Security Institute has highlighted that the officially reported parameters deviate from the earlier estimations. The actual figures for both indicators stand at 11.3% and 8.6%, respectively, which necessitates a revision in the pension adjustment. Consequently, according to the Swiss rule formula, the proposed increase in pensions would be set at 10%, resulting in a saving of BGN 100 million compared to the previously allocated budget.