BULGARIA - The Bulgarian government has said it will abandon its plans to redirect funds from 'professional' pension funds into the first pillar, but it will withdraw some money for early retirees.

The government, citing the need to plug the state deficit, had previously planned to withdraw BGN465m (€237m) from the nine professional pension funds for workers in arduous labour jobs, such as miners or pilots.

But these plans are now off the table following media pressure and criticism from the International Monetary Fund.

However, the government has said it still wants to redirect some funds for the first wave of early retirements between 2011 and 2014.

Members of these professional funds are entitled to early retirement, and over the next four years, the benefits should have been paid out from the first pillar, as well as the second pillar, as the system was only introduced in 2000.

According to an agreement with trade unions that will still have to pass parliament, the assets of the members retiring over the next four years would be transferred to the first pillar, and from 2015, the professional pension funds would pay out benefits.

Miroslav Marinov, deputy chief executive and CFO at PAC Doverie, told IPE: "The transfer is expected to be in cash till 31 March 2011 and is something like BGN100m, which is about 20% of the current assets under management."
 

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