Professional Pension Funds
Професионални пенсионни фондове
Coverage
Mandatory insurance
- Persons working in the 1st and 2nd labour categories.
Opting out
- One-time option for opting out upon request with the requirement to transfer to statutory old age pension scheme (restriction: transfer only possible before reaching early retirement age).
Financing
General finances
- Fully funded schemes financed by contribution payments and capital revenues.
Contribution payments
- Fixed share of monthly gross earnings: 12% for the 1st labour category and 7% for the 2nd labour category of the gross earnings entirely covered by the employer.
State support
- Employers’ contribution payments are recognised as expense and are not subject to tax.
- The investment returns of the funds which are then placed in the individual accounts are not subject to tax.
Administration
- Pension plan providers manage pension funds and pay benefits directly to the eligible person.
- The National Revenue Agency gathers the required contributions and transfers them to the respective pension insurance companies.
- The Financial Supervision Commission regulates licenses, oversees and sanctions the occupational pension plan providers.
Qualifying Conditions
- For 1st labour category: retirement age is 10 years lower than the standard retirement age of the statutory old age pension scheme; minimum insurance periods: 10 years in 1st labour category, acquired after 31/12/1999.
- For 2nd labour category: retirement age is 5 years lower than the standard retirement age of the statutory old age pension scheme; minimum insurance periods: 15 years in 2nd labour category (or in both 1st and 2nd labour categories), acquired after 31/12/1999.
Benefits
Pension payments
- Fixed-term early pension payment received until the reaching of the standard retirement age of the statutory old age pension scheme.
- Accumulated capital through contribution payments and investment yields, minus administrative costs and costs/fees of pension provider.
- Fixed-term early pension; option for one-time lump sum payment.
- Depend on the term of pension payment, the biometric tables, and the technical interest rate (an interest rate derived from actuarial mathematics, used to discount future benefits in order to determine their present value).
Taxation and social security contributions
- Pension payments are not subject to tax.
- Contributions for health insurance are covered by the state budget.
Coverage
Financing
Administration
Qualifying Conditions
Benefits
Mandatory insurance
- Persons working in the 1st and 2nd labour categories.
Opting out
- One-time option for opting out upon request with the requirement to transfer to statutory old age pension scheme (restriction: transfer only possible before reaching early retirement age).
General finances
- Fully funded schemes financed by contribution payments and capital revenues.
Contribution payments
- Fixed share of monthly gross earnings: 12% for the 1st labour category and 7% for the 2nd labour category of the gross earnings entirely covered by the employer.
State support
- Employers’ contribution payments are recognised as expense and are not subject to tax.
- The investment returns of the funds which are then placed in the individual accounts are not subject to tax.
- Pension plan providers manage pension funds and pay benefits directly to the eligible person.
- The National Revenue Agency gathers the required contributions and transfers them to the respective pension insurance companies.
- The Financial Supervision Commission regulates licenses, oversees and sanctions the occupational pension plan providers.
- For 1st labour category: retirement age is 10 years lower than the standard retirement age of the statutory old age pension scheme; minimum insurance periods: 10 years in 1st labour category, acquired after 31/12/1999.
- For 2nd labour category: retirement age is 5 years lower than the standard retirement age of the statutory old age pension scheme; minimum insurance periods: 15 years in 2nd labour category (or in both 1st and 2nd labour categories), acquired after 31/12/1999.
Pension payments
- Fixed-term early pension payment received until the reaching of the standard retirement age of the statutory old age pension scheme.
- Accumulated capital through contribution payments and investment yields, minus administrative costs and costs/fees of pension provider.
- Fixed-term early pension; option for one-time lump sum payment.
- Depend on the term of pension payment, the biometric tables, and the technical interest rate (an interest rate derived from actuarial mathematics, used to discount future benefits in order to determine their present value).
Taxation and social security contributions
- Pension payments are not subject to tax.
- Contributions for health insurance are covered by the state budget.
Legal Basis: Social Security Code (Кодекс за социално осигуряване), Part II, Sub-Part II; Decree on the Categorisation of Labour for Retirement Purposes (Наредба за категоризиране на труда при пенсиониране); Law on the Taxes of the Incomes of Natural Persons (Закон за данъците върху доходите на физическите лица) Chapter 4; Law on Health Insurance (Закон за здравното осигуряване).