22.02.2023

WHAT IS THE MINIMUM RETURN OF MANDATORY PENSION FUNDS?

The Financial Supervision Commission has determined the minimum yield for mandatory pension funds for the period from December 31, 2020 to December 30, 2022, the Commission announced.

Since insurance in a universal and professional fund is mandatory, and the state does not provide guarantees to cover losses in the management of these funds, the legislator has provided a special mechanism for guaranteeing a minimum yield.

For this purpose, a reserve is created in the pension fund, which is formed by the excess of the yield achieved by the fund above a certain percentage above the average, as well as a second reserve in the company, which is in the amount of not less than 1% of the fund's assets.

The reserve in the pension company is formed with its own funds and serves to cover the difference to the minimum yield when the reserve in the fund is exhausted.

All funds for supplementary mandatory pension insurance have achieved profitability for the specified period above the specified minimum level of profitability for the respective type of fund, reports the regulator.

The minimum yield of universal pension funds for the period, on an annual basis, is minus 6.36 percent. For the period with a positive yield of all universal pension funds, only universal pension fund "TCB Sila" has a yield of 1.07 percent on an annual basis.

The minimum yield of professional pension funds for the period on an annual basis is minus 5.13 percent. There are four funds with a positive yield - professional pension fund "Saglasie" - with an annual yield of 0.76 percent, professional pension fund "TCB Sila" - 2.80 percent annual yield, professional pension fund "Badeshte" - 1.11 percent hundred and professional pension fund "POI" with a yield of 0.14 percent per year.

The weighted average annual yield of voluntary pension funds for the last two years is minus 1.3 percent on an annual basis, reports the Commission for Financial Supervision. Voluntary pension fund "Saglasie" - 5.56 percent, voluntary pension fund "TCB Sila" with a yield of 4.04 percent and voluntary pension fund "NOI" - 1.05 percent annual yield have a positive annual yield.