The government has approved changes to the Social Security Code, which provide that Bulgarians can receive an additional pan-European pension product.

In practice, this means that funds from other countries in the European Union will be able to enter the market in Bulgaria, collect insurance contributions and pay pensions here, reports pariteni.bg.

The European Pension is an additional voluntary personal pension product, which aims to complement the existing mandatory and occupational pension schemes and products in the Member States.

The framework for its creation and delivery is not intended to replace or harmonize existing national personal pension products or schemes, nor to affect existing national statutory and occupational pension schemes and products.

Payment of increased pensions begins

This will allow the transfer of insurance and pensions from one EU country to another when the person moves.

The European pension will be received at the normal retirement age.

It may be inherited in case of premature death of the insured.

Each insured person will be able to have only one European pension account.

European pensions will be entirely voluntary, similar to the voluntary pension insurance funds that currently exist in Bulgarian legislation, the bill also provides.

Pension products will differ from each other, and people will have the opportunity to participate in the management of investments themselves, choosing profitable but risky or less risky but safer options for managing their funds.

With a view to ensuring the widest possible range of providers of such a pension product, Regulation (EU) 2019/1238 establishes uniform rules for the registration, establishment, distribution, portability and supervision of PEPPs and regulates the possibility for all financial undertakings that manage client funds and can carry out activity cross-border, can create and offer it, such as credit institutions, life insurance companies, occupational pension insurance institutions, investment intermediaries, investment companies, management companies and persons managing alternative investment funds.

In this way, the aim is to stimulate competition in the offering of personal voluntary pension products.

The conditions in relation to the accumulation phase and the payout phase are not defined by the Regulation, as it takes into account the significant differences in the pension insurance systems of the Member States, which are not harmonized.

Therefore, the Regulation gives freedom to Member States to determine the conditions in relation to the accumulation phase and the payout phase, which will be applicable to all providers who provide a sub-account for insurance under Bulgarian legislation.

The conditions in the accumulation phase and the payout phase, which are determined at the national level for persons insured under PEPP, are similar to those applicable to the current national voluntary personal pension product - insurance in a fund for supplementary voluntary pension insurance.