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The Bulgarian Old Age Security System in 2020

By Teodora Petrova, Max Planck Institute for Social Law and Social Policy

The history of the Bulgarian old age pension system dates back to the adoption of the first Constitution in 1879. Throughout the years, the pension system has undergone several reforms changing the fundaments of its institutional structure especially during and after the period of socialism (1946–1989). Since 1990, some of these substantial reforms involved the establishing of private and occupational pension schemes in addition to the traditional public pension schemes. As of today, the ‘standard’ level of protection against financial risks in old age can be achieved mainly via mandatory insurance in public pension schemes and automatic enrolment in private pension schemes where part of the mandatory insurance contributions, determined by law, is transferred. Some professional groups are additionally automatically enrolled in occupational pension schemes providing the former with the option of early retirement. Further, old age pensions can be ‘topped up’ through voluntary enrolment in supplementary private and occupational pension schemes, which are incentivised by tax reliefs. The pension system also contains last-resort pensions that guarantee a monthly ‘minimum’ income for elderly persons who do not qualify for any other old age pension and have no further means to support themselves. Outside the pension system, a modest safety net is provided through general social assistance measures. 

Standard Protection in Old Age

Most of the economically active population, consisting of the 3rd labour category (non-hazardous jobs) and the 1st and 2nd labour categories (different degrees of hazardous jobs), is mandatorily enrolled in the public, pay-as-you-go (PAYG)-financed statutory old age pension scheme  (Пенсия за осигурителен стаж и възраст).1 All of the persons insured in the statutory old age pension scheme, including the self-employed, are also automatically enrolled in the private capital-funded universal pension funds  (Универсални пенсионни фондове)Persons can choose to opt out from this private scheme and direct the entirety of their mandatory pension insurance contributions to the public scheme. Some of the public sector employees are insured in a separate public pension scheme, the so-called pensions in the defence and security sector  (Пенсии в сектор “Отбрана и сигурност”) that has its own separate pension fund. Most of these public sector employees, namely military and police personnel, are also enrolled in the universal pension funds. Exceptions to this rule are civil servants working for the State Intelligence Agency, the Military Intelligence Service of the Ministry of Defence and the State Agency for National Security, who are excluded from participating in the capital funded scheme.

Due to the nature of their work, persons working in hazardous jobs (i.e. the 1st and 2nd labour categories) are further insured through contributions paid by their employers into capital-funded occupational pension schemes, the so-called professional pension funds  (Професионални пенсионни фондове), providing a fixed-term early pension. If persons opt out from these funds, they must continue their insurance for early pension in the statutory old age pension scheme. Teachers are also mandatorily enrolled in a special occupational scheme, namely the teachers’ pension fund  (Учителски пенсионен фонд), where additional contributions are paid by their employers. The scheme provides either a fixed-term early pension or a supplement to the old age pension, based on when the benefits are claimed.2


The options for the topping up of the pension income comprise the voluntary occupational pension schemes  (Професионални пенсионни схеми) and the voluntary private pension insurance (Частно пенсионно осигуряване). The former are usually provided to employees of a given enterprise, as a result of negotiations with the employer and on the basis of insurance contributions provided by the enterprise. The exact circle of participants in these schemes is usually determined in a collective agreement (concluded between the employer/the employer association and the trade union) or collective labour contract (between the employees and the employer). In the case of the private pension insurance individuals have the option of creating their own individual pension savings account, where they can choose between different conditions. Every person who has turned 16 can participate voluntarily in a private pension scheme by making instalments on a monthly or other temporal basis. Participation in such schemes, which are approved by the state, is incentivised by some tax relief measures. 


The provision of a minimum income level in old age is guaranteed by various measures and schemes. Persons eligible to public pensions of the statutory scheme are guaranteed benefits of at least the amount of the minimum statutory pension level. Elderly persons not eligible to any other pension, including pension entitlements from other countries, can apply for a monthly guaranteed minimum income of the social old age pension (Социална пенсия за старост) at age 70. The scheme is means-tested and takes into account the annual income of the applicant and other family members and provides a modest safety net against poverty to elderly persons. For specific groups, such as elderly mothers of numerous children and persons who have taken care of sick family members for more than 10 years, the system provides targeted, means-tested pensions, so- called personal pensions  (Персонални пенсии) at the age of 67. These pensions are granted on an individual basis by the Council of Ministers, requiring the elderly person not to qualify for any other pension and to have at least three years of insurance. As a last resort, persons suffering from material deprivation and who may not (yet) qualify for the social pension can apply for social assistance (Социално подпомагане). General social assistance measures are strictly means-tested and fall outside the pension system as they do not specifically target senior citizens. Recipients of the social old age pension or the personal pension can still be eligible for targeted social assistance benefits for housing and heating.

1 The following is intended to provide an overview of the most up-to-date system only concerning those born after 31/12/1959.

2 As the main function of the professional pension fund and the teachers’ pension fund is to provide a fixed-term early retirement pension instead of long-term financial security in old age, these schemes are not pictured in the Pension Map for Bulgaria.  

Full Report:
Schneider S. M., Petrova T., Becker U. (eds.), Pension Maps: Visualising the Institutional Structure of Old Age Security in Europe and Beyond, 2nd ed., Munich: MPISOC, 2021.

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