site.btaSupplementary Pension to Be Guaranteed by Legislative Amendments

109 ECONOMY - SECOND-PILLAR PENSIONS

Supplementary Pension to
Be Guaranteed by
Legislative Amendments


Sofia, August 9 (BTA) - By a pension contract signed with the pensioners upon retirement, universal pension funds will undertake to guarantee them a lifetime supplementary pension of a minimum amount to be calculated on the basis of the gross total of the contributions as actually transferred by the National Revenue Agency and accumulated on the beneficiary's account.

This will be regulated by amendments to the Social Insurance Code drafted by a working group for the improvement of legislation on the phase of payment of Second Pillar pensions, Bulgarian Labour and Social Policy Minister Bisser Petkov said here on Thursday. Retirement insurance companies, employers, trade unions and experts have reached agreement on the revisions.

Bulgarians born after 1959, who fall in the commonest Work Category 3, will receive a supplementary pension for life if the amount accumulated on their universal pension fund accounts is sufficient for a monthly payment equivalent to at least 20 per cent of the minimum contributory-service and retirement-age pension (or a little over 40 leva at present).

If the Fund's return on assets is positive, the amount of the supplementary pension will be larger. If the amount accumulated on the account is insufficient for a monthly payment of at least 20 per cent of the minimum pension, the pensioner will be entitled to receive his or her money in portions, and if the amount is exceedingly low, he or she will be able to withdraw it in a lump sum. In such case, the beneficiary will be able to choose a guaranteed period of 5, 10 or 15 years (to be fixed in the pension contract) during which the amount accumulated will be paid either to the pensioner himself or herself or to his or her surviving heirs (if any). A lifetime pension will be heritable as well.

Petkov is afraid that when the first women entitled to a supplementary pension (born in 1960) retire in 2021, quite a few of them will be unable to receive a lifetime pension because the amounts accumulated on their accounts will be insufficient to ensure the minimum monthly level. The first men entitled to a Second Pillar pension will retire in 2024. At that time, a larger number of guaranteed lifetime pensions will be available. LI/LG
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