BULGARIA - Assets managed by Bulgarian pension fund asset managers have topped the €1bn threshold for the first time, according to the local financial regulator the Financial Supervision Commission (KFN).
At the same time, the assets in universal pension funds, the main second pillar vehicle, broke through the BGN1bn (€511m) ceiling.
Bulgarian pension fund management companies offer three types of funds, two forms of second pillar pension funds - universal pension funds that are mandatory for everybody born after 31 December 1959 and professional funds for those working under difficult conditions and so can take early retirement - and third pillar voluntary funds.
"The assets for all three types of pension vehicles reached BGN1.97bn, or €1bn," a KFN spokeswoman told IPE.
Universal funds posted a 42.6% increase in assets gain during 2007, according to KFN data.
The rise followed an increase in the rate of contributions to universal funds to 5% of a salary at the beginning of 2007. The level has risen gradually since the schemes began with a 2% contribution rate in 2001 but there have been suggestions should rise to 6%.
"We calculate that in the compulsory universal fund contribution should be a minimum of 8.5% just to ensure a 15-25% replacement rate," said Stanislav Dimitrov, chief executive officer at pension provider DSK-Rodina.
The asset growth of supplementary voluntary pension funds over the same period was 18.89% and that of occupational pension funds was 18.95% the KFN data said.