Will there be pensions for people after 2040?

In an interview with bTv today the Minister of Labour and Social Policy commented on whether or not there will be pensions for people in 20 years time. His comment was rather negative and explained that the economy is bound to do better between 2030 - 2040. This will ensure pensions up to the year 2040. The growing economy will be a premise for a better functioning pension system, however, this, will not be the case after 2040, when accessability to pensions will become harder.

What are the causes? A great problem is demographics. Due to mass migration of students to the Western World, Bulgaria is suffering on two fronts, when it comes to demographics. The median age of the population is over 43. Aging is a natural process, but the deficit of young people has affected this particular feat. The other problem is not the age, but ethnicity and background of people leaving the country. Students aspiring to live and study abroad rarely come from minorities and have a good background, when it comes to school. Currently in Bulgaria, ethnic Bulgarians tend to be better educated than some of the larger minority groups, so the loss is particularly heavy.

Since pensions in Bulgaria work on the basis of generational solidarity it is reasonable to think that at a certain point it will become harder for people to provide pension for the older generation as it will grow bigger and bigger. 
Minister Petkov explained that key to success is the inclusion of all children up to the compulsory school age. Classrooms need to be full, not only in schools but in colleges and universities as well. The deficit of qualified personnel is something that stops the economy from growing. Unfortunately the number of children which drop out of education is quite high, particularly among those minority groups

The government is also considering giving further incentive for mothers of new-borns to come back to their work places earlier by paying reparations. On a side note the government has planned some 20 Million BGN investment in daycare for the children of working couples. It is estimated that about 2000 families will benefit from this initiative, with the goal being to utilize the unemployed, meaning that both parents and the people providing daycare will benefit from it. 

(Picture taken from: www.24chasa.bg )

Vasil Manev

Vasil Manev is a student in Computer Science and an aspiring columnist, studying in Heidelberg, Germany.

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