Universal Pension Funds

Mandatory insurance

• All persons insured in the statutory old age pension scheme.
• Military and police personnel insured in the pensions in the defence and security sector scheme.

Opting out

• Multiple possibilities for opting out with the requirement to transfer to statutory old age pension scheme (restriction: at least one year required between the previous exercise of this right, and up to 5 years before reaching the standard retirement age of the statutory old age pension scheme). 

General finances

• Fully funded personal pension plans based on contribution payments and capital revenues. 

Contribution payments

• The total contribution rate equals 5% with contribution assessment ceiling.
• Contributions shared between the employer (2.80%) and the employee (2.20%); the self-employed and seafarers contribute the same total rate themselves (5%).

State support

• Employees’ contribution payments are tax-deductible.
• 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 pension plan providers.

• Based on reaching the standard retirement age of the statutory old age pension scheme.
• The pension can be claimed up to 5 years before reaching the standard retirement age of the statutory old age pension scheme if the accumulated capital allows for the payment of a benefit higher than the minimum amount of the standard old age pension (BGN 250). 

Pension payments

• Accumulated capital through contribution payments and investment yields, minus administrative costs and costs/fees of pension provider.
• Life-long annuity paid monthly (using unisex-mortality tables); option for one-time lump sum payment or fixed-term pension.
• 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.