To Touch The Second Pension. The Payout Phase Is Gaining Momentum – Banker Daily
After so many years of promises and agitation, but also of baseless insults and administrative harassment, universal funds have convincingly defended the meaning of their existence. They did it in a natural way: they started paying the second pensions to people who meet the conditions for it and asked for their money. In this way, the breeding ground of the “anti-dads” was taken away – former ministers, unrealized professors and union beauties, and they will have to look for other “pastures” for their malice.
„Around 30% – 40% from the people reached the retirement age have contacted the private pension funds how much they can get and asked for their money. Most people at the moment obviously prefer to keep working so that their antiquities can grow even more.” This was explained to “BANKER” by Evelina Miltenova, Chairwoman of the Bulgarian Association of Supplementary Pension Security Companies (BASPSC), specifying that these are data as of mid-November.
Around 30% of those who have exercised their right to a “second pension” are already pensioners from the National Social Security Institute. The remaining 70% are people without sufficient experience for a pension from the National Social Security Institute or those who deliberately postpone receiving a state pension, including because retirement from the UPF does not allow the employer to dismiss them due to retirement. This was explained by Daniela Petkova, Chairman of the Management Board of Doverie Pension Insurance Company and a member of the Management Board of BASPSC.
“Bulgarians are conservative and are in no hurry – in this case – to receive their second pension. However, the process is going smoothly. As of mid-November, about 1,700 contracts for receiving a second pension have been signed or are in the process of being drafted, “Miltenova said. By the end of the year, these contracts are expected to grow to about 2,300.
The expectations during the next year many more people want to receive their second pension as they reach the required age. Upon reaching retirement age, according to the available money in their accounts in private pension funds, pensioners can take them together, rescheduled for a certain period or receive a lifetime pension.
Those, who have decided in advance what their second pension will be, choose the deferred payment and stop at the maximum amount of BGN 300, says Evelina Miltenova. As of December 25, the minimum pension becomes BGN 370. This may be one of the reasons why people are in no hurry to receive their money from universal pension funds. Next year they will be able to choose their pension to be BGN 370, but of course they will receive the money for a shorter period than if they take BGN 300 per month.
As you know, eligible people can choose between three ways to take their second pension – the money immediately and in a pile, rescheduled over time and, do not be surprised! – for life, similar to the state pension.
All of a sudden, those who have accumulated money on their account in the universal pension fund can take their money below the triple amount of the minimum pension, which currently means less than BGN 900.
Deferred pensions can be between 15% of the minimum pension and the minimum pension for the country, which currently means between BGN 45 and BGN 300. By choosing how much they want to receive each month, the amount of money they receive will depend on the available money – one, two or, for example, 10 years. Lifetime pensions must be above 15% of the minimum, i.e. currently over BGN 45.
The parameters of the most preferred type of lifelong pension – the one with deferred payment, are on average over BGN 220 per month for the period of deferred payment, which in turn is about 60 months. After the end of the period, the average amount of the monthly lifelong pension (at this stage) is around BGN 50-55. On average, there are over BGN 17,000 in the accounts of these people. This was specified by Daniela Petkova.
For lifelong pensions with a guaranteed payout period, the average amount is BGN 60-70 for about 10 years. With this type of pension, the monthly amount does not change after the end of the period, but is subject to mandatory updating at least once a year. The average size of the accounts for this type of pension is about BGN 14,000.
The first standard lifelong pensions are currently an average of BGN 50-60 per month, but I expect that every next month, along with the continuing accumulation of accounts, they will grow. The average amount of batches for this type of pension is BGN 11,000, Petkova added.
According to the FSC data, from the beginning of the payment of the second pensions on September 1 to September 30, the universal pension funds have set aside BGN 334,000 for lifelong pensions, BGN 824,000 for deferred and BGN 7,000 for one-time payments. This means that only 10-20 people had less than BGN 900 and took them together.
As of September 1, there are already women reaching the age that entitles them to claim their second pension from the private fund. The condition for receiving a second pension is that the insured must have been born after the beginning of 1960 and have reached the age of receiving a state pension. For 2021, for women this means the age of 61 years and 8 months, and for men – 64 years and 4 months, so there are still no men who are entitled to a second pension.
Working Bulgarians have accumulated an average of BGN 4,168.85 for a second pension, show the data of the Financial Supervision Commission (FSC) at the end of September. This money is enough to receive a pension of BGN 300 for a year and two months.
The money accumulated in the personal accounts of the insured in the private pension funds depends on how many years they have worked and on what income they pay social security contributions. Therefore, the money of young people who have recently worked is significantly less than the money of people with long service experience. But people between the ages of 60 and 64, who are about to retire, also don’t have a lot of money for old age.
According to the FSC data, the average amount of the insured in the universal pension funds aged 60 to 64 is BGN 4,443. Men have an average of BGN 4,616, and women – a little less, an average of BGN 4,252. The reason for this is that most often the salaries of men are higher than those of women.