Private Pension Insurance
Частно пенсионно осигуряване
Coverage
Voluntary participation
- Persons who have turned 16.
Financing
General finances
- Fully funded personal pension plans based on contribution payments and capital revenues.
Contribution payments
- Persons provide contributions themselves and decide on the amount of contribution payments and the length of the contribution period.
State support
- Contribution payments which are up to 10% of the monthly income are tax-deductible.
- The investment returns of the funds which are then placed in the individual accounts are not subject to tax.
- The incomes to the funds (coming from contribution payments) 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 pension plan providers.
Qualifying Conditions
- Based on the acquisition of the right to the standard old age pension of the statutory old age pension scheme.
- The pension can be claimed up to 5 years before reaching the standard retirement age of the statutory old age pension scheme.
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- If the accumulated capital is withdrawn after the acquisition of the right to the standard old age pension of the statutory old age pension scheme, pension payments are not subject to tax.
- If the accumulated capital is withdrawn before the acquisition of the right to the standard old age pension of the statutory old age pension scheme, the amounts of the pension benefit corresponding to the insurance contributions for which tax advantages were used are subject to 10% tax.
- Pension payments are not subject to social security contributions.
Coverage
Financing
Administration
Qualifying Conditions
Benefits
Voluntary participation
- Persons who have turned 16.
General finances
- Fully funded personal pension plans based on contribution payments and capital revenues.
Contribution payments
- Persons provide contributions themselves and decide on the amount of contribution payments and the length of the contribution period.
State support
- Contribution payments which are up to 10% of the monthly income are tax-deductible.
- The investment returns of the funds which are then placed in the individual accounts are not subject to tax.
- The incomes to the funds (coming from contribution payments) 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 pension plan providers.
- Based on the acquisition of the right to the standard old age pension of the statutory old age pension scheme.
- The pension can be claimed up to 5 years before reaching the standard retirement age of the statutory old age pension scheme.
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 the acquisition of the right to the standard old age pension of the statutory old age pension scheme, pension payments are not subject to tax.
- If the accumulated capital is withdrawn before the acquisition of the right to the standard old age pension of the statutory old age pension scheme, the amounts of the pension benefit corresponding to the insurance contributions for which tax advantages were used are subject to 10% tax.
- Pension payments are not subject to social security contributions.
Legal Basis: Social Security Code, Part III (Кодекс за социално осигуряване). Law on the Taxes of the Incomes of Natural Persons, Chapter 4 (Закон за данъците върху доходите на физическите лица).