05 Feb Let’s sort out your financial life, savings and pensions together
The easy way to plan successful and sustainable personal and family finances
The recession has started in Germany, two wars are raging in the north and south of Bulgaria, the demographic crisis is strangling us and migration pressure is intensifying. For now, the Bulgarian economy is adaptive and resilient with decent growth and great chances to join the euro area and fully join Schengen by the end of the year. Unemployment is relatively low and deposits in banks have reached BGN 80 billion. The big boom in mortgage lending continues and has exceeded BGN 20 billion, in no small part as a result of the traditional understanding and deep belief of Bulgarians that real estate “holds money” and “does not want bread and water”, i.e. serves as a safe investment without large maintenance costs. However, neither is true anymore due to the inflation of materials, energy and labour in depreciation and uncertainty in the real estate market, and the tax burden will inevitably grow. Many of the newly built apartments are empty due to insufficient solvent demand from tenants. The indebtedness of the population on consumer loans is also growing and has reached BGN 12 billion, and the interest burden on some of them – the so-called ‘quick loans’ – inevitably deepens poverty and causes financial crises in families and companies with unstable business models.
In today’s complex world, full of risks and opportunities, the choice is yours and must be made in good time
One possible way to cope in this turbulent environment, which will not settle down soon, is to choose a reliable Universal Pension Fund (UPF) for our mandatory additional pension contributions under the so-called “Second Pillar” and opt for a Voluntary Pension Fund for our pension savings. The timely and correct selection of an appropriate pension fund will help a lot to ensure that your contributions and savings are well managed, being invested in a legal, balanced and competent manner to provide a good return that will directly affect the amount of your second pension and the amount of voluntary savings that are always available to you. Savings and proper management of personal and family finances have lifted billions of people out of poverty and contributed to happier and more carefree lives.
One obvious example where “Your money never sleeps”
The thousands of members (pensioners) who chose the ‘DallBogg: Life & Health’ PF before the start of 2023 saw their own personal accounts (pension accounts) grow by 10.08% after it ended, an enviable return in the 2023 pension industry in the country. What is even more impressive is that this highest return for the past year was achieved by the youngest pension company, only 2 years old. Obviously, the competence, morality and dedication of fund managers have serious potential and are above the European level, because in Europe there are only very few funds with returns above 10%. That is why a quick and correct orientation is crucial. The attached graph, based on data from the FSC, shows that all Bulgarian universal pension funds reported positive returns of varying sizes over the past year and most of them met the raised expectations.
Your choice today is forward-looking when it depends on undisputed actual performance and proven capacity
It’s time to look around and park our retirement money where it’s safe, where it’s profitable! Total security is ensured by a strict licensing regime and day-to-day oversight by the regulator. However, profitability within this strict statutory framework is a product of competence and reprehensibility in managing investment risks. For example, since the beginning of the pandemic, a number of funds in Europe, the United States and Japan that invested heavily in assets backed by corporate real estate have experienced severe difficulties or have declared bankruptcy. The work of millions of people in the so-called home office has irreversibly shaken this segment, which for a number of decades was considered very stable and certainly lucrative. Now, in December and January, Europe is being overwhelmed by a respiratory ‘triad’, a cocktail of three viruses: influenza, Covid-19 and RSV, which is reducing productivity and exacerbating all the other emerging problems that have led to a number of major strikes in several sectors. But whether investing in healthcare, which is underfunded everywhere, and in what assets exactly, will deliver increased returns is one of a thousand critical questions facing fund managers.
The examples spontaneously cited demonstrate the extraordinary importance of competence and foresight in the investment process. Due to their inadequacy and a number of other objective factors and policy decisions, pension systems today face increasing budget constraints, deficits and low returns. Therefore, new opportunities for increased productivity, innovation and discovery need to be harnessed to serve investors and savers to achieve healthy, facilitated and longevity.
2023 – the year of PAC DallBogg: Life and Health – boosted everyone’s confidence: “we are doing very well together”
“And indeed, with the enviable 10.08% yield achieved on the funds in the individual accounts of the insured persons in the ‘DallBogg: Life and Health’ pensions in 2023, we can hope that the distance with the Western Europeans is shortening for the time being,” says Ms. Larisa Borisova, Head of ‘Internal Control’ at the pension company. Because it is “crucial” – according to her – “that in the future our small, highly motivated and cohesive collective will be able to realize and report such and higher results for a number of years…embraced by a constant drive for development, high professional morale, expertise and dedication to the interests and investment goals of our members are our greatest virtues.”
The facts and explanations set forth are not related to and are not a promise of future performance nor a guarantee of future positive returns. A comparison with the data can be made at the Financial Supervision Commission website (https://www.fsc.bg).
The facts and explanations set forth are not related to and are not a promise of future performance nor a guarantee of future positive returns.
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