BASPSC

Bulgarian Association of supplementary pension security companies

Author: Ивета Александрова Мирчева

BASPSC in the media / News

Interview of Vladislav Russev, member of the Managing Board of BASPSC in the TV Program “In Development”, on Bloomberg TV Bulgaria – March, 8th 2022.

Vl. Russev: The crises will be overcome and there will no collapse of the economy.
The changes for the pension insurance funds will be short-term – we will not reconsider the strategy, said the Chief Executive Director of the PIC Allianz Bulgaria.
Whatever happens there will be no collapse of the economy, this crisis will be overcome no matter how severe from humanitarian point of view. This was commented on Bloomberg TV Bulgaria by Vladislav Russev, Deputy Chairman of the Managing Board and Chief Executive Director of the Pension Insurance Company – PIC Allianz Bulgaria.
According to him, from the point of view of the pension funds the will be short-term. “I do not believe there will be a need for a general rethinking of the strategy. At the moment the most important is to limit the damage to the investments and to position ourselves in the right way for growth that will inevitable come”, he said.
Russev reminded, that Russia has perceived as risky location for investments and is categorical that this attitude will not require general changes.
The guest confirmed that this is not the first financial crisis, during which the sector will go through. “We can search analogies with other similar crises, the last one was 2020 when the corona crises began. Then the markets fell more than now. The fall started in February, in our financial pension funds it was around 10%, but by the middle of the year was overcome, commented the financier.” – At the moment the falling of the markets is not under the levels we started in 2021. This means that the profitability of the markets from 2021 has not been erased.”
He reveals that for the last three years the yield is about 15%. “This which currently are the markets loosing is one third if this positive return for the last three years,” said Russev.
The financier shared that certain news make the markets to react positively. “This is what is happening today with the European markers that reacted positively to the news for the issuing of the European bonds for the defense and energy support”, stated Vladislav Russev.
What is the current state of the financial markets? How would the central banks react if the sanctions are extended and an embargo on energy sources and raw materials is reached? When will there be portfolios with different risk profile depending of the age of the client? See the whole interview in a video of Bloomberg TV Bulgaria тук

News / Research and statistics

The Number of the Insured Persons in the Supplementary Pension Insurance Funds Reached 4.849 Million as of 31-st of December, 2021, Net Assets BGN 19.557 Billion.

The Insurance Supervision Department of the FCS announced the preliminary results of the supplementary pension insurance activity as of December 31st, 2021. The information was obtained on the basis of reports, submitted by the pension insurance companies of the Financial Supervision Commission. The data on the distribution of the insured persons by sex and age in the supplementary pension insurance funds as of December 31st, 2021 have also been published.

The total number of the insured persons in the four types of funds for supplementary pension insurance as of 31st of December, 2021 is 4 849 754 persons, increased compared to September 30th, 2021 by 0.64 per cent.
As of December 31st, 2021, net assets amounting to BGN 19,557,121 thousand have been accumulated in the supplementary pension insurance funds. Compared to the end of 2020 the net assets of the pension insurance funds increase by 13,08 per cent. The total income of the pension insurance companies for 2021 amount to 311,101 thousand leva. By the end of 2021, 7 lifelong pension funds (FIPP) and 9 deferred payment funds (DPF) have been established. During the period September 1st, 2021 – December 31st, 2021 total 270 pension contracts are concluded for the payment of the supplementary lifetime old-age pension and 1863 contracts for deferred payment of funds with the first persons, insured in the universal pension funds and reaching retirement age. In order to make payments to these persons during the period September 1st, 2021 – December 31st, 2021, BGN 4,491 thousand were transferred from their individual accounts to the FIPP and BGN 8,625 thousand to the DPF. During the same period, BGN 52,000 was paid for pensions by the FIPP, and BGN 596,000 was paid by the DPF for deferred payments to insured persons and BGN 8,000 once to heirs of insured persons who received deferred payments.

Funds in the amount of BGN 58,000 were paid once from the universal pension funds to insured persons who have reached retirement age and had very small pension savings.
The information about the preliminary results of the pension funds and the funds for making payments for 2021 as well as for the insured persons and the accumulated amounts in the pension funds as of December 31st, 2021 by sex and age could be found in the section: Markets / Insurance market/ here.

News / Research and statistics

The Insurance Supervision Department of the FCS announced the preliminary results of the supplementary pension insurance activity as of December 31st, 2021. The information was obtained on the basis of reports, submitted by the pension insurance companies of the Financial Supervision Commission. The data on the distribution of the insured persons by sex and age in the supplementary pension insurance funds as of December 31st, 2021 have also been published.

The total number of the insured persons in the four types of funds for supplementary pension insurance as of 31st of December, 2021 is 4 849 754 persons, increased compared to September 30th, 2021 by 0.64 per cent.

As of December 31st, 2021, net assets amounting to BGN 19,557,121 thousand have been accumulated in the supplementary pension insurance funds. Compared to the end of 2020 the net assets of the pension insurance funds increase by 13,08 per cent. The total income of the pension insurance companies for 2021 amount to 311,101 thousand leva. By the end of 2021, 7 lifelong pension funds (FIPP) and 9 deferred payment funds (DPF) have been established. During the period September 1st, 2021 – December 31st, 2021 total 270 pension contracts are concluded for the payment of the supplementary lifetime old-age pension and 1863 contracts for deferred payment of funds with the first persons, insured in the universal pension funds and reaching retirement age. In order to make payments to these persons during the period September 1st, 2021 – December 31st, 2021, BGN 4,491 thousand were transferred from their individual accounts to the FIPP and BGN 8,625 thousand to the DPF. During the same period, BGN 52,000 was paid for pensions by the FIPP, and BGN 596,000 was paid by the DPF for deferred payments to insured persons and BGN 8,000 once to heirs of insured persons who received deferred payments.

Funds in the amount of BGN 58,000 were paid once from the universal pension funds to insured persons who have reached retirement age and had very small pension savings.
The information about the preliminary results of the pension funds and the funds for making payments for 2021 as well as for the insured persons and the accumulated amounts in the pension funds as of December 31st, 2021 by sex and age could be found in the section: Markets / Insurance market/ here.

 

News / Research and statistics

Results of Private Pension Funds for 2021 – Main Indicators

The net assets of the Bulgarian private pension funds increased by 3.8% QoQ (+BGN 724m) and by 13.1% YoY (+BGN 2.3bn) to BGN 19.6bn as of end-2021, according to data released by the Financial Supervision Commission. The contributions during the quarter came to record high of BGN 536m while the total number of insured individuals in all 4 types of pension funds was 4.8m at end-2021, +0.5% QoQ and +0.6% YoY.

The amount of the investments grew by BGN 935m to BGN 17.7bn over the quarter while the uninvested cash declined by BGN 339m to BGN 1.7bn or 8.8% of the net assets. The investments in government bonds increased by BGN 637m after 2 consecutive quarters of declines and reached all-time high of BGN 9.2bn or 47.2% of the net assets while corporate bonds were down by BGN 114m to 7.9% of net assets. The growth of equity investments came to BGN 417m, reaching BGN 6.6bn and accounting for 34% of the net assets.

2021 revenue of the pension insurance companies rose 43.1% on annual basis to BGN 311.1m with income from fees and charges increasing 17.6% YoY. The net income improved by 30.2% YoY to BGN 75.2m.

The annual weighted-average nominal rate of return for the last 24 months period as of end-2021 came to 2.94% for UPF (+2.39% at end-September), +3.29% for PPF (+2.64% at end-September) and +4.34% for VPF (+3.46% at end-September).

 

News / Research and statistics

In January 2022, the Financial Supervision Commission (FSC) Published the Results for the Reported Two-year Return of the SPI funds for the Period 31.12.2019 – 31.12.2021.

The FSC data at the end of December 2021 show higher levels of the achieved two-year return on funds, namely the weighted average return for two years, which for UPF reaches 2.94%, for PPF 3.29% and for VPF 4.34%, compared to the data for the previous quarter of 2021. By the end of September 2021 these indicators had reached the following values for the period 30.09.2019 – 30.09.2021: weighted average return for the two-year period: for UPF 2.39%, for PPF 2.64% and for VPF 3.46%.
The steady trend of good performance, measured by this return on funds in 2021, continues after the outbreak of the COVID pandemic in March 2020 and the emergency measures taken by central banks.
Over the past period, the investment strategies of pension companies have focused on making measured and timely investment decisions in view of rising risks, high dynamics of international capital markets and prices of financial instruments taking into account the uneven economic recovery of the world economy.
More information of the reported two-year yield for the period December 2019 – December 2021 can be found of the following section of FSC website:

https://www.fsc.bg/?page_id=22048

 

 

International news and events / News / Papers and presentations / Research and statistics

PensionsEurope – WG IORP and WG PPP – EIOPA publish 2021 Consumer Trends Report

Consumer Trends Report 2021 – EN

We would like to inform you that today EIOPA published the 2021 Consumer Trends Report. You can find the report attached or download it here.

The report covers both the insurance and the pension sectors, identifying market developments, trends, and (new) risks for consumers and members/beneficiaries.

The second chapter of the report focuses on pensions and distinguishes between IORPs and Personal Pension Products (PPPs). After having shortly described the market developments and issues, the report also includes two specific topic areas, respectively on sustainability in the pension sector and impact of COVID-19. The two final sub-chapters (2.3 and 2.4) are dedicated to the complaints filed and to NCAs’ supervisory activities.

Please find below a short summary of the main findings:
– On IORPs
o a shift from state pensions to private pension providers is observed – the total number of members and beneficiaries of IORPs in the EEA increased
o the shift from DB schemes to DC, already identified in previous editions of the report, remains noteworthy
– On PPPs
o The number of contributors to personal pension products increased in most jurisdictions
o Trends in personal pension markets continue to vary significantly across countries
– On sustainability in the pension sector
o In light of the SFDR, pension funds have begun to update their internal investment policies and disclosure document. Nevertheless, the scale varies and it is early to assess its adequacy.
o Only a few Members States observed a remarked increase of occupational pension products or personal pension products with a sustainable investment objective (DK, EE) while in others a slight increase was observed (AT, LV, LT, PT).
o Most NCAs shared their intention to conduct thematic reviews to monitor the implementation and outcome of these new sustainability requirements.
o The way pension providers conduct their business is expected to be re-shaped in the near future as a consequence of the SFDR rules. The scheme design and the asset allocation are anticipated to be revised, as well as the engagement with consumers and beneficiaries
– On the impact of COVID-19
o The impact of COVID-19 has not been uniform across countries. Several Member States cannot conclusively say whether the COVID-19 crisis has negatively impacted pension contributions.
o Nevertheless, almost one third of the national markets reported a decrease in contributions mainly due to shrinking in business (sponsor contributions) and lower personal income.

On January 12, 2022 BASPSC Took Part in the Sitting of the Committee on Labor, Social and Demographic Policy of the National Assembly

Uncategorized

On January 12, 2022 BASPSC Took Part in the Sitting of the Committee on Labor, Social and Demographic Policy of the National Assembly

On behalf of the Managing Board of BASPSC, Ms. Evelina Miltenova, Chairwoman of BASPSC, attended the meeting of CLSDP, which introduced the team of the Minister of Labor and Social Policy, which answered current questions from deputies.

BASPSC supported, on behalf of the supplementary pension insurance companies, the presented draft legislation for discussion submitted by the Council of Ministers on December 7th, 2021, Covered Bonds Draft Law, № 47-102-01-7” in view of the need to bring the Bulgarian legislation in line with the requirements of EU Directive 2019/2162.

Based on the new Law on Covered Bonds, credit institutions in Bulgaria will be able to issue covered bonds as low-risk instruments with a high degree of public oversight, for which a legal framework is created to foster the investments in secured fixed income instruments of major institutional investors such as the universal pension funds (UPF) and the Supplementary Voluntary Pension Insurance funds (VPF) and others.

The draft law was adopted at the first vote by the CLSDP.

 

News

On January 12, 2022 BASPSC Took Part in the Sitting of the Committee on Labor, Social and Demographic Policy of the National Assembly

On behalf of the Managing Board of BASPSC, Ms. Evelina Miltenova, Chairwoman of BASPSC, attended the meeting of CLSDP, which introduced the team of the Minister of Labor and Social Policy, which answered current questions from deputies.

BASPSC supported, on behalf of the supplementary pension insurance companies, the presented draft legislation for discussion submitted by the Council of Ministers on December 7th, 2021, Covered Bonds Draft Law, № 47-102-01-7” in view of the need to bring the Bulgarian legislation in line with the requirements of EU Directive 2019/2162.

Based on the new Law on Covered Bonds, credit institutions in Bulgaria will be able to issue covered bonds as low-risk instruments with a high degree of public oversight, for which a legal framework is created to foster the investments in secured fixed income instruments of major institutional investors such as the universal pension funds (UPF) and the Supplementary Voluntary Pension Insurance funds (VPF) and others.

The draft law was adopted at the first vote by the CLSDP.

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