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Reading: Deficit in the Pension Fund is currently is the Biggest Problem
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Sarajevo Times > Blog > BUSINESS > Deficit in the Pension Fund is currently is the Biggest Problem
BUSINESS

Deficit in the Pension Fund is currently is the Biggest Problem

Published June 11, 2016
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novalicPrime Minister of the FBiH, Fadil Novalic, said that the most challenging thing for him is to solve issues of pensioners, which is a large deficit in the Pension and Disability Insurance PIO of about 192 million BAM. He is currently dedicated the most to this problem.

He announced that he will solve this issue soon, adding that the problem arose because of frivolous relation towards the pension fund at a certain period in the past, and that something is a consequence of legal solutions.

“When talking about unrealistic solutions, I think of the increase in the pension fund which were made in the past, but which had no basis in income,” explained the Prime Minister.

As the second problem, he noted the adoption of legislation that has come into force since the New Year, and had a guideline on temporary retirement with 57 years, which resulted in 16,000 people moving from the work area to pensioners.

Speaking of meeting the objectives of the Reform Agenda, Novalic underlined that 17 out of 61 have been fulfilled so far, or about 28 %, and that it is a very good tempo.

“Some of the objectives are very difficult, such as labor legislation, and some are apparently easier, but take longer time to be implemented, such as the Law on Bankruptcy, Law on Commercial Courts, measures against fiscal charges. They seem banal, but take a long time. The interoperability of ‘one stop shop’ requires 18 months,” noted Novalic.

He confirmed that there is a debt of state companies of two or three billion BAM, because there are interest rates and all related costs and he announced that the government will encourage measures that will guarantee the current payment of obligations with maximum delay of previous commitments with the ability to write off interest rates, in case the debt gets paid back.

“It is clear that this debt cannot be returned immediately, but maybe in 10 years. It is not a problem for us to treat everything more strictly, except health care, mines and railways. That is about 30,000 people who do not pay. But, we cannot block those companies like that because we will be left without electricity, health treatment, or other 40,000 people that send their goods through rail will also be at risk,” added Novalic.

Therefore, he says that in these three segments they have called upon the World Bank to do restructuring, whether to go into debt in order to resolve the current situation, to reduce the number of employees or ensure more responsible corporate governance.

(Source: klix.ba)

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