Occupational Pension Schemes
Професионални пенсионни схеми
Coverage
Voluntary participation
- Employees, with participation being based on collective or individual agreements.
- Possibilities for voluntary enrolment vary in relation to the different conditions offered by the employers.
Financing
General finances
- Fully funded personal pension plans based on contribution payments and capital revenues.
Contribution payments
- Contribution payments are usually split between the employer and the employee (proportions vary).
State support
- Contribution payments of the employee up to 10% of the monthly income are tax-deductible.
- Monthly contribution payments of the employer up to BGN 60 are tax-exempted; higher contribution payments are subject to 10% tax.
- The investment returns of the funds which are then placed in the individual accounts are not subject to tax.
Administration
- Pension plan providers manage pension funds and pay benefits directly to the eligible person.
- The Financial Supervision Commission regulates licenses, oversees and sanctions the occupational pension plan providers.
Qualifying Conditions*
- Minimum age 60; the pension can be claimed up to 5 years before reaching age 60.
* Conditions are regulated in pension regulations at company or collective level.
Benefits
Pension payments
- Accumulated capital through contribution payments and investment yields, minus administrative costs and costs/fees of pension provider.
- Life-long annuity paid monthly (using unisex mortality tables); option for one-time lump sum payment or fixed-term pension; right of the insured person to withdraw at any time the accumulated capital in the individual account.
- Depend on the term of pension payment, the biometric tables, and the technical interest rate (an interest rate derived from actuarial mathematics, used to discount future benefits in order to determine their present value).
Taxation and social security contributions
- If the accumulated capital is withdrawn after reaching the retirement age specified in the collective or individual agreement, pension payments are not subject to tax.
- If persons withdraw the accumulated finances before the retirement age specified in the collective agreement, the withdrawn sum is subject to 10% income tax.
- Pension payments are not subject to social security contributions.
Coverage
Financing
Administration
Qualifying Conditions*
Benefits
Voluntary participation
- Employees, with participation being based on collective or individual agreements.
- Possibilities for voluntary enrolment vary in relation to the different conditions offered by the employers.
General finances
- Fully funded personal pension plans based on contribution payments and capital revenues.
Contribution payments
- Contribution payments are usually split between the employer and the employee (proportions vary).
State support
- Contribution payments of the employee up to 10% of the monthly income are tax-deductible.
- Monthly contribution payments of the employer up to BGN 60 are tax-exempted; higher contribution payments are subject to 10% tax.
- The investment returns of the funds which are then placed in the individual accounts are not subject to tax.
- Pension plan providers manage pension funds and pay benefits directly to the eligible person.
- The Financial Supervision Commission regulates licenses, oversees and sanctions the occupational pension plan providers.
- Minimum age 60; the pension can be claimed up to 5 years before reaching age 60.
* Conditions are regulated in pension regulations at company or collective level.
Pension payments
- Accumulated capital through contribution payments and investment yields, minus administrative costs and costs/fees of pension provider.
- Life-long annuity paid monthly (using unisex mortality tables); option for one-time lump sum payment or fixed-term pension; right of the insured person to withdraw at any time the accumulated capital in the individual account.
- Depend on the term of pension payment, the biometric tables, and the technical interest rate (an interest rate derived from actuarial mathematics, used to discount future benefits in order to determine their present value).
Taxation and social security contributions
- If the accumulated capital is withdrawn after reaching the retirement age specified in the collective or individual agreement, pension payments are not subject to tax.
- If persons withdraw the accumulated finances before the retirement age specified in the collective agreement, the withdrawn sum is subject to 10% income tax.
- Pension payments are not subject to social security contributions.
Legal Basis: Social Security Code, Part III (Кодекс за социално осигуряване); Law on the Corporate Income Tax, Part 4 (Закон за корпоративното подоходно облагане).