FSC Reports Increased Returns for Bulgarian Pension Funds

Pension funds in Bulgaria have recorded positive returns over the past two years, according to the Financial Supervision Commission.

The minimum annual return of the ten universal pension funds stands at over 3%. In voluntary pension insurance, the weighted average return for the period is 7.5%. These figures come amid amendments to the Social Security Code and the introduction of a multi-fund model.

More about the reform can be found in the new episode of BNT’s specialised podcast Business.bg, which will be available on BNT’s online platforms tomorrow.

Miroslav Marinov, Bulgarian Association of Supplementary Pension Insurance Companies:
“The major shortcoming of the current system is that funds are invested in the same way for all insured individuals at the same time. With four million people insured in the funds, they all follow the same investment portfolio, which does not meet the needs of 16-year-olds entering the system, nor of 65-year-olds who are leaving it and starting to receive a pension. This is what we are trying to change.”

Hristina Hristova, expert and former Minister of Social Affairs:
“It is right that people’s life cycle is taken into account. Those under the age of 50 have a longer horizon in the labour market and greater opportunities to make contributions, and if less favourable investment results occur, they can be corrected over time. For those over 50 and up to around three years before retirement, it is logical and natural for investments to become more balanced and risk to be reduced.”