22.02.2023
UNIVERSAL PENSION FUND - EVERYTHING YOU NEED TO KNOW
Additional mandatory pension insurance is the second pillar of our pension system.
All persons born after December 31, 1959 are obliged to provide for a second pension in a universal (for those working under the conditions of the third labor category) or professional (for those working under the conditions of the first and second labor categories) pension fund.
This happens in addition to the insurance in the "Pensions" fund of the state social insurance (DOO).
The purpose of supplementary mandatory pension insurance in a universal pension fund (UPF) is to provide additional income by providing an additional lifelong old-age pension upon reaching retirement age.
Initial allocation
Insured persons participate in a universal pension fund through an individual application to the pension insurance company, submitted within three months of the initial occurrence of the obligation to provide insurance.
For persons who have not chosen a universal pension fund, official distribution is carried out according to the registered universal funds in the manner and according to the order determined by the National Revenue Agency and a commission.
What contributions are received in the UPF?
Insurance in the UPF is carried out on a capital-coverage basis. The amount of the contribution is 5% of the insurance income, with 2.8% from the employer and 2.2% from the employee.
Insurance contributions and the return on their investment are accumulated in an individual account of the insured person.
Upon retirement, the person receives one "state" pension from the Social Insurance Institution and a second pension from the UPF. Its amount depends on the funds accumulated on his account and the realized yield from their investment.
The fees
Universal pension funds charge two types of fees on our money. "Management fee" is deducted from each insurance contribution that is transferred to the pension fund. It is in the amount of 3.75% of the amount.
The investment fee is 0.75%. It is withheld on an annual basis from the value of the fund's net assets, depending on the period during which they were managed.
Rights of insured persons and heirs
Insured persons can only be insured in one universal pension fund. The rights to the accumulated sums under the individual lots are personal (only the insured person or his heirs have rights to them).
The insured person has the right to transfer the accumulated funds of the individual lot from one universal pension fund to another.
Types of pensions and payments
Insured persons who have reached retirement age under the conditions of the third category of work are entitled to receive the funds accumulated in their individual accounts in the UPF. The method of obtaining depends on their size and personal choice.
One-time payment - when the funds are less than BGN 1,401 - three times the amount of the minimum pension for length of service and age (BGN 467)
Deferred payment – when the funds are more than three times the amount of the minimum pension, but are not sufficient to grant the minimum lifetime pension of BGN 70.05 (15% of the minimum pension).
Additional lifetime pension - at the current amount of the minimum pension (BGN 467), to grant the basic pension from the UPF above the minimum amount, BGN 14,372 is required.
How can I check in which pension fund I am insured?
Can I withdraw funds from my individual account before retirement?
The law allows those insured in a universal and/or professional fund to withdraw up to 50% of the accumulated funds in their individual account in case of a permanently reduced working capacity of more than 89.99%, certified by an expert decision of TEMC/NEMC.
