Those insured in private pension funds will be able to choose between three ways to invest the money from their individual accounts with different degrees of risk and depending on their age. The youngest - in a dynamic sub-fund, people up to 50 years old - in a balanced one, and those who have up to three years left before retirement - in a conservative one.
This is provided for by the changes to the Social Security Code published for public discussion, the Bulgarian National Radio reported.
The expectations are that the introduction of this principle of fund management, known as "multi-funds", will lead to achieving higher profitability, said Vladimir Nechev from the Bulgarian Association of Supplementary Pension Insurance Companies:
"Because this means more active management of funds. In the beginning, when individuals have a longer investment horizon in front of them, they will be invested to a greater extent in equity instruments, which is the practice of OECD countries and in general of all those that have introduced this fund model, shows that profitability can be even up to twice as high as what we currently have with us as a conservative and balanced type of management".