Challenges and Opportunities Before Supplementary Mandatory Pension Insurance with the Introduction of the Multi‑Fund System in Bulgaria

Authors:

Pages: 136-143

Abstract:

This report analyzes the transformation of the second pillar of the pension system in Bulgaria through the introduction of the multi-fund structure. The study focuses on the life cycle “investment paths” model as a tool to address demographic challenges. It is proven that a smooth, three-stage transition between sub-funds is key to the sustainability of the model. Supplementary pension insurance is a complementary element of the multi-pillar insurance model in Bulgaria. Its main function is to supplement the pension income and to ensure maximum and reliable security of the insured upon reaching retirement age. This is done mainly by coverage of the main risks of insurance protection. The pension system in Bulgaria faces a number of challenges in terms of its adequacy and adaptability to the ever-changing conditions of the economic environment and the dynamic demographic changes that have drawn negative trends in recent years.

Keywords:

pension fund; pension insurance companies; investment; inflation; multi-fund system.

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