Insurance contributions to rise to 10%

Insurance contributions to rise to 10%
Insurance contributions to rise to 10%

BGN 30 million were paid to insured persons and their heirs for the first half of the year from the mandatory and BGN 47.4 million from the voluntary pension funds, says Evelina Miltenova

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A discussion on the topic “Pension and insurance system: state, problems, vision for development” was organized by the Bulgarian Chamber of Commerce. Twenty-four years have passed since the reform in this sector. At the same time, for the period from 2000 to 2022, the population of the country has shrunk by nearly one million , the number of people of working age nearly tripled. What is the vision for the development of the system and what still needs to be done. Evelina Miltenova spoke on these issues. She is the chairman of the board of the Bulgarian Association of Supplementary Pension Insurance Companies.

Much has been achieved in the twenty-four years since the three-pillar pension scheme was introduced. At the moment we have ten supplementary pension insurance companies.

A peculiarity with us is that

unlike the first pillar, in universal funds it still remains 5%, and for occupational pension funds (OPF) it is 7 percent. As of June 30, the universal pension funds (UPF) manage assets in the amount of 18 billion 2 million BGN, as of September they are already over 18 billion 6 million BGN. At the same time, our customers are 3,987 people.

In occupational pensions

funds, the amount of assets is no longer BGN 1 billion 460 million, but BGN 1 billion 480 million, and the clients are 324,000 people who work under difficult working conditions.

In the supplementary voluntary insurance (VPF), the assets are in the amount of BGN 1 billion.35 million, and their clients are a total of 653,000. The net assets of the supplementary pension insurance funds are already over BGN 21 billion.

In the first six months

this year, insured persons and their heirs were paid a total of BGN 30 million from the mandatory funds (UPF and PPF) and BGN 47.4 million from the voluntary funds. 1,695 people receive lifetime pensions, another 14,401 receive deferred payments with an average monthly amount of BGN 399. In 2014 and 2015, there were decisions on transfers to the NSI, where there have been delays in the last one to two years.

A process has already begun

resuming to universal pension funds, as this is a completely different product, and NOI does not accumulate yield. At times, according to data based on information from the National Revenue Agency, more than BGN 15 million were returned to the UPF. Companies make payments in several varieties – three types of lifetime pensions, installment payments and lump sum payments. The latter are for pensioners, whose lots are extremely low, below three times the amount of the minimum pension.

The system appears to be working

good. However, it is necessary to review the amount of insurance contributions under the second pillar of the pension system, that is, the supplementary mandatory pension insurance (DZPO). We think it is only right that they should begin to rise smoothly, reaching 10 percent. Thus, we will have a higher labor income replacement ratio, less pressure on the solidarity pillar and, accordingly, overcome the accumulated deficits in it.

It is necessary to create and

a predictable, long-term oriented regulatory framework. The aim is to guarantee stability and trust in the pension system and at the same time not to oppose the complementary solidarity pillar and capital schemes. We believe that the goals of policies regarding pension insurance should be related to increasing the financial literacy of the insured persons. In addition, it should be possible for them to choose funds with a different investment profile based on the life cycle – “multi-funds”.

The article is in bulgaria

Tags: Insurance contributions rise


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