/ world today news/ It is about a cardinal change in the pension system, which until yesterday was broken, and as of January 1st it will be broken, financier Lyubomir Hristov said on BNR.
She guarantees all her patients poverty in old age. Second – what the National Assembly adopted as texts that are not completely clear, does not solve any problems – neither of the people, nor of the National Institute of Public Finance, nor of the public finances, on the contrary – it creates new ones. Third – universal pension funds are also not the solution to the problem, because they are managed unprofessionally, sloppily and the result is minus 3% real return on average for 2002-2013. Minus 3% means that people’s money is melting, is the firm opinion of the financier.
Freedom of choice is an important argument, Hristov stressed, but added: “Psychology has shown that there are circumstances in which the costs of choice are greater than the benefits you may get from freedom of choice. These circumstances arise when a person does not have the necessary knowledge and expertise to make the choice when one wants security, but there is risk in one or the other option that one will choose, and when it comes to the indefinite uncertain future. All three elements figure in the choice of a pension system”.
The problem is not only in pension funds. The problem starts with the Social Security Code, goes through the Financial Supervision Commission and finally the pension funds. That’s the problem with choice – where there is no choice. You have an obligation to contribute 5% of your insurance income to universal, but you have no choice about how your funds are managed. This is in the law – the Social Insurance Code, said Hristov.
Discussions have been going on for years, but they are piecemeal. There will never be an agreement if we don’t first agree on what we want from this pension system. If one wants guarantees, and another wants profitability – there is no way we can agree on the measures, the expert also commented, he added
Regarding the case of KTB, Hristov said that the big scandal is the delusion that we have a structure of a state and institutions that do work. “This is what KTB shows. The common thing between the pension topic and the banking system is that we are not a regulated country, that you cannot count on the fact that you have property and that you cannot be responsible. Since it does not depend on you, you cannot to bear responsibility”.
The financier suggests: “All those who were members of the BNB Board from the moment when KTB’s balance sheet number and assets were 2 billion until June 19th of last year, should be kind enough to return all the salaries they received in The Deposit Guarantee Fund, to sell all the property and the money will go to the Fund, which will not reach. But someone has to start bearing some responsibility to understand that it can’t be like this anymore”.
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