The choice of a sub-fund for the so-called second pension starts today and will continue until the end of November. The insured will be able to make changes to their choice once a year, and anyone who has not expressed their desire will be assigned automatically according to their age, reports BNT.
The multi-fund model will be operational from January 1 next year. The three sub-funds will provide different returns for people. The dynamic one is most suitable for people up to 50 years old, as it will provide over 7% returns. For older people who have more than three years left until retirement, a balanced sub-fund with an average return between 4 and 7% is recommended.
In the last three years, it will be mandatory to switch to a conservative sub-fund with a return of around 2-3%. For the first time, after a quarter of a century since the introduction of the capital pillar in the pension system, insured persons have the opportunity to choose how their savings for the "second pension" will be managed.
Vladimir Nechev, member of BADDPO: "The estimates show that with the introduction of the multi-fund model, the profitability may be 2-3% higher than the current model, which we can safely say is between 5-6% in the long term."
The calculations show that with an average salary of 1,140 euros, a 40-year insurance period and a 5% average annual profitability, an amount of over 139 thousand euros would accumulate. The lifetime pension from a universal pension fund under the current model would be 500 euros, and under the multi-fund model – 780 euros.
Svetla Nestorova, member of BADDPO: "The gross amount is guaranteed - you cannot lose the insurance contributions you have made. The worst that can happen is that you do not profit from them, but it has not happened and will not happen, because ultimately long-term investment, such as pension insurance, brings profitability."
There is also a change in the company fee, which is tied to the results achieved.
Prof. Lyudmila Vekova, university lecturer: "At the same time, this will direct insured persons to companies that achieve higher investment results. This is also a step in the right direction that protects the interests of insured persons."
The next step, according to Prof. Vekova, is to review the coefficient from which the state pension you will receive is calculated, if you also receive one from a pension fund. This would encourage provision in the funded pillar, which is the global trend.