site.btaLegal Revisions on Multi-funds in Second-Pillar Pension Insurance Clear First-Reading Committee Stage

The National Assembly Committee on Labour and Social Policy on Wednesday voted, 13-4 with no abstentions, to approve on first reading a bill to amend and supplement the Social Insurance Code by which the Government proposes the introduction of multi-funds in supplementary retirement insurance.

The revisions enable the insured to choose a way in which their pension savings are managed, reckoning with the risk tolerance of the separate categories of individuals that varies by the phase of their life cycle, the reasoning to the draft legislation reads.

Presenting the bill, Deputy Finance Minister Kiril Ananiev said that sub-funds with various investment profile are planned to be set up. "The amendments are intended to enhance the protection of the insured," he argued. Ananiev stressed that the bill has resulted from years of discussions and dialogue among the institutions concerned and the social partners. He added that the bill has enlisted broad support and that critical comments have been taken into consideration. 

The Debate

Committee Chair Denista Sacheva MP of GERB-UDF: The parliamentary group backs the proposal. The bill concerns nearly five million Bulgarian citizens and their savings that, including accumulated returns, amount to BGN 30 billion [slightly over EUR 15.3 billion]. The bill is not proposed by outgoing politicians but by experts who have been working on the subject for years.

Elisaveta Belobradova MP of Continue the Change - Democratic Bulgaria: This is a long awaited reform. The proposal ushers in a natural stage in the development of the pension system, it is implemented in other countries, too. Regulators will have to exercise strict control over the implementation of the change.

Georgi Georgiev MP of Vazrazhdane: You lack legitimacy to propose such a bill. You're pushing through a bill that is crucial for every citizen at the last minute [before early parliamentary elections]. Where is the roadmap for the pension system?

Ayten Sabri MP of MRF - New Beginning: The multi-funds can potentially enhance the return on retirement insurance contributions. The parliamentary group will back the bill. Before it comes up for second reading, the group will move modifications on the mechanism for control and monitoring of the investments selection.

Nina Dimitrova MP of BSP - United Left: This last-minute bill should be left for an in-depth debate to the next National Assembly. An expert approach needs to be taken, taking care of both pensioners' future and young employees' post-employment security and stability.

Tsvetan Predov MP of There Is Such a People: The parliamentary group will back the bill. It should have come up for a debate and adoption much earlier.

Hasan Adenov MP of Alliance for Rights and Freedoms: All provisions benefit the insured. The parliamentary group will back the bill.

Kostadin Hadzhiiski MP of Velichie: The parliamentary group supports the bill in principle.

Valeri Apostolov of the Podkrepa Confederation of Labour: The introduction and debate of the bill have been rushed.

Maya Gramovska of the Confederation of Independent Trade Unions in Bulgaria (CITUB): CITUB supports the bill in principle.

The Bulgarian Industrial Association, the Bulgarian Industrial Capital Association and the Bulgarian Private Equity and Venture Capital Association: The bill is an important step.

Svetla Nestorova of the Bulgarian Association of Supplementary Pension Security Companies: The bill is remedying substantial structural deficiencies of the pension system, such as the current arrangements for capital adequacy and the requirements for pension companies' solvency.