The country’s pension system is facing ongoing fiscal pressure and, if no action is taken, the deficit is expected to reach 6.3 percent of GDP in 2030. According to an analysis commissioned by the Fiscal Council on the sustainability of the scheme, it will reach its highest level—around 6.6 percent—during 2035–2037.
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The most critical phase is projected for the 2038–2048 period, when transition expenditures will peak and the ratio of people paying social security contributions to pensioners will fall below 1.3.
According to the analysis, the situation has been influenced by factors that have accumulated over more than two decades. The main causes include the reduction of the contribution rate from 21.2 percent to 18 percent, repeated increases in pensions beyond the formula established by law, demographic changes and the shadow economy.
The data show that since 2023, pension expenditures have increased much faster than contribution revenues. In 2025, expenditure growth is projected at 19 percent, while contribution revenues are expected to grow by 8.8 percent.
The Fiscal Council estimates that temporary measures to increase pensions should also be abandoned, particularly across-the-board increases.
“This is not a demographic effect, but a result of pension indexation and across-the-board increases,” the Fiscal Council said.
A proposed solution is a comprehensive package of measures, including a gradual increase in the contribution rate to 20 percent, indexation based solely on inflation, a reduction in the informal economy and greater participation by women in the labor market.
Nikola Memov, director of the Pension Insurance Fund, also supports increasing the contribution rate, but emphasizes that the process should be carried out gradually.
“This 18.8 percent is not enough for us to pay our pensions at present. Our calculations also show this. The contribution rate must be increased, but gradually,” Memov said.
Memov stressed that the current methodology for paying pensions also needs to be changed. According to him, a protective mechanism should be established and oversight of preferential pensions should be strengthened.
Regarding the second pension pillar, which has become part of the public debate, the Fiscal Council recommends reviewing the investment structure and shifting toward riskier investments that offer higher returns.
