In early March, the parliament allowed private pension funds to invest, for example, in the stock markets 5% of the pension money of working Bulgarians, which we contribute to the second pillar of pension insurance. For this purpose, multi-funds were created that will invest our money as we wish - conservatively, dynamically or balanced.
But in recent days, a National Citizens' Initiative was established, which insists on eliminating the obligation for every worker to also insure himself in a private pension fund as a second pillar. In addition, they want the new parliament to prohibit risky investment of pension funds in the stock markets without the express consent of the insured persons.
"Currently, of the 20 percent that we give for pensions, 14% goes to the National Social Security Institute and they are spent on paying off obligations to current pensioners. Only 5% goes to private pension funds, where they are saved, invested and increased. When it comes time for retirement, a person receives them, and if something happens to him, his children inherit them. These are personal saved and invested funds". This was explained in the "Interview in NOVA News" by the deputy chairman of the Bulgarian Association of Supplementary Pension Insurance Companies (BADDPO), Svetla Nestorova.
In her words, every euro that does not enter the second pillar, but goes to the National Social Security Institute, is spent immediately. "The National Social Security Institute does not invest and does not save money for citizens. It collects contributions and pays them out immediately. That is, if the money is directed from the second pillar to the National Social Security Institute, it will simply be spent immediately," Nestorova emphasized.
She was categorical that of all the money that Bulgarian citizens give for taxes and insurance, the only funds that are saved and increased in their name are the money that goes to the second pillar of private pension funds. "Everything else comes in and immediately goes out to cover the state's expenses - be it social or others. There are no other funds saved for you. The only personal funds that are accumulated and invested are those in the second pillar. Why? Because they do not come to us. They go to people's individual accounts and batches. We have no right to any access to these funds. They are completely separated from the funds of pension companies. These funds are invested and, moreover, are guaranteed," specified Nestorova.
And she explained that every citizen has the right to decide whether their funds will be invested ultra-conservatively, with minimal risk, whether they will go to a balanced fund, where they will be managed approximately as before, or to a dynamic fund. "A person chooses for himself and can change this choice every year. The reform does not oblige you to be a dynamic investor. It gives those of us who wish the opportunity to make such a choice," she emphasized.
For three months - from September 1 to the end of November, people will be able to exercise a preliminary choice of what they want to happen to their funds. After that, they will be able to change this choice every year at their own discretion.
She reassured the Bulgarians: "The amount of all gross contributions that a person has made is 100% guaranteed. And starting next year, a person's first pension will also be guaranteed, which means that the accumulated income will also be guaranteed for the entire retirement period. So, contrary to the initiative's claims, these are perhaps the only guaranteed and inheritable funds that anyone has collected for the citizens of this country.