Bulgaria is establishing its first private pension supervisory body expected to be functioning by the beginning of next year.
The authority, charged with licensing all fund management companies and investment products offered to Bulgarian employees, is in the process of appointing a chairman, with a decision set to be made this month.
Creation of the supervisory body follows recent parliamentary action on employee pension contributions and rights during which the Bulgarian government addressed issues concerning pension fund management reporting to a supervisory body. Guidelines were also drawn up for the partitioning of pension fund management companies within insurance groups.
Nickolai Slavchef, chief retirement schemes analyst at the voluntary pension fund organisation of Allianz Bulgaria, says: “We have never had an agency in Bulgaria that can regulate and follow every kind of private pension transaction. The market was fairly liberal up until now.
“Pension fund companies already in operation, according to new rules, will now have to register as a pension fund management company in order to be legally allowed to collect contributions, carry out investment and pay benefits.
“Under the legislation, the pension fund management companies must be a separate legal entity and be responsible solely for managing funds and not linked to the parent insurance company.” Slavchef adds that pension fund management companies will have to comply with the supervisory body rules and apply for a licence within six months of its inception.
Establishment of the regulatory body is still dependent on the finalising of local government elections taking place in Bulgaria and is expected to speed up once these have ended. Hugh Wheelan