Author: DB

09 Mar The power of voluntary pension saving: Warren Buffett’s example at 10% annual returns

by Veronika Yordanova and Biser Ivanov

Investing in your future through retirement savings in a voluntary pension fund (VRF) is not only fashionable, but also very beneficial for personal finances and family security. High discipline and persistence in voluntary saving for retirement, from early or middle age, yields lasting results. Fund managers, within strictly regulated limits, are responsible for diversifying and balancing risk – with care to provide ever higher returns. We received thousands of questions, many positive comments and advice on the published annual return figures for universal pension funds in Bulgaria for 2023. Therefore:

1. The results achieved in the relatively stable and safe, due to the extremely strict regulation, investment process speak for themselves:

2. The award-winning American investor Warren Buffett, 93, also called the “Oracle of Omaha” because he lives in the state of Nebraska, defines successful investing as a snowball that we or our chosen stewards of our money – funds and others – roll down a snowy slope. If the slope is longer, i.e., if we start saving at an early age and live longer, even if the initial “snowball” is small, it will grow significantly at a 10% annual return. We will achieve the same result if we start with a larger ‘snowball’ in mid-life, again due to the same ‘compounding’ or ‘compound interest’ effect; in company growth there is a similar concept – Compound Annual Growth Rate, CAGR ). In other words, as a new 10% is added each year on top of the original investment, it also increases by 10% on the realised and compounded returns over the past years.
3. Buffett’s example in dollars, which could be even more valuable in euros or euros at a 10% annual return if the depreciation of the dollar continues significantly longer:

10 thousand dollars invested today at a 10% annual compounded return will become almost 175 thousand dollars in 30 years, more than 450 thousand dollars in 40 years, and 1,170 million dollars in 50 years. The same extrapolation can be made for a 100 thousand initial investment in a voluntary pension fund over 30 years and a 10% annual compounded return, the amount could reach 1.750 million (i.e., 17.5 times or 17,500 percent increase); over 40 years, 4.5 million, and over 50 years the same amount, at the same annual return, could reach11.7 million!

Of course, all the examples and models are under the condition of actually achieved annual returns in a real maintained account (batch) with accumulation over the whole period.

______________________________ Special Reserve ____________________________

A description of the significance of the achieved rate of return and investment risk indicators

Nominal return – this is the return achieved on the management of a fund’s assets. It is calculated by dividing the difference between the value per unit of the fund valid for the last business day of the relevant year and the value per unit of the fund valid for the last business day of the previous year by the value per unit valid for the last business day of the previous year.

Standard Deviation – is a statistical measure of the dispersion of the values of a random quantity about its average or expected value. Standard deviation is accepted as one of the main indicators for measuring the risk of an investment portfolio.

Sharpe Ratio – an indicator that compares the returns achieved from managing an investment portfolio and the risk taken to achieve those returns.

The methodology for calculating the achieved nominal return and the level of investment risk is in accordance with Annex 15 of the „Regulation № 61/ 27.09.2018 of the FSC.

The investment policies of the funds managed by „PAC DallBogg: Life & Health“ are available on the Company’s website – https://dallbogg.bg, section „Investments“.

A description of the significance of the achieved rate of return, the level of investment risk, the methodology for calculating and the investment policy of the fund are available on the Company’s website – https://dallbogg.bg, section „Investments“/ „Rate of return and risk“.

15 Feb PAC DallBogg: Life and Health established its Deferred Retirement Pension Fund

Along with the skillfully managed funds – universal, professional, voluntary and life pension funds, “POD DALLBOGG: Life and Health” EAD has established its own lifelong pension fund. By Decision No. 82-FFP dated 13.02.2024, the Financial Supervision Commission entered the Fund in the register under Article 30, paragraph 1, item 13 of the Financial Supervision Commission Act.

At DallBogg Pensions we guarantee stability and security for all our clients. Our commitment is unwavering and we take responsibility that every payment will be made on time, with personalized care and professionalism, and we will provide peace of mind and well-being to those who trust us.

You can find more information about the Fund here in Bulgarian.

14 Feb Why are high returns in pensions extremely valuable and highly sought after when choosing your fund?

Veronika Yordanova, Director Regulation and Legal Assistance

Because if and when it is achieved, the returns are solid and the result of competence and foresight realised in an extremely tightly regulated investment process.

Tight regulation of the investment process is not an end in itself of the legislator or a frivolous pursuit of the regulator. Its main objective is the full and comprehensive protection of the interests of assured persons and the most comprehensive channeling of risk-taking and risk management in the investment process. The investment principles introduced by the Social Security Code aim to invest the funds in accordance with the long-term interests of the assured persons, respecting the principles of reliability, liquidity, profitability and diversification. The introduction of strict quantitative limits and categories of investable assets is intended to achieve precisely this objective by diversifying and calibrating the forms, methods, terms. The assumption and management of investment risk in pensions is the most rigorous and heavily underwritten regulation among all formats in the vast industry of foreign money management.

All pension funds are reliable in terms of security and stability, but how much return they produce on our pension money is the main question!
The official allocation or the official first choice of pension fund for individuals starting their working career is done by a committee set up under the National Revenue Agency, according to certain criteria applied to all pension funds:
– the annual return achieved by the pension fund concerned based on the previous 24-month period;
– the amount of fees charged by the pension companies on each contribution;
– number of individual applications accepted for new participation in a universal or occupational pension fund.

The three criteria shall be applied on the basis of the quarter preceding the service allocation. After one year from the last transfer, insured persons are free to choose another Universal Pension Fund (UPF) or Occupational Pension Fund (OPF) for their compulsory supplementary pension contributions. Any person over the age of 16 can choose to put their savings into a Voluntary Pension Fund to provide greater financial security for their old age and to help achieve longevity. The main criteria by which this choice is made in developed democratic countries are the returns achieved and confidence in the qualifications and morals of the fund managers – naturally, because they all work under the same regulation and equal rights. The scale of individual funds matters little when comparing returns because very often, even more often, small funds achieve higher proportional returns over years.

The qualifications, dedication and morale of fund managers lead to high returns

Vast arrays of information, advanced training at leading universities and experience gained at global financial institutions are a great advantage for fund managers in any modern pension company. There are different routes to achieving good returns – by outsourcing the investment process to external, specialist investment companies or by developing in-house expertise, which is always more cost-effective, but only after it has risen to a global orbit. Or by “passively” following stock indices, with the alternative of “actively” investing requiring more round-the-clock cultivation of investment portfolios. Naturally, in-house (internal) and active management of elevated levels of risk-taking can and does yield higher, even record returns, but is difficult to achieve and sustain over long periods. In these days of geopolitical turmoil, wars, technological revolutions, economic and migration processes, and uneven development of the workforce and its productivity – even the use of artificial intelligence by the most skilled fund managers cannot create guarantees of long-term success.

When hands are on the tiller and the driver is disciplined, skilled and well experienced – he will go far

Because there are always crises and upswings in individual business sectors, diversification is a regulatory requirement in the pension fund investment process. And it is with the ability to execute mandatory diversification, taking into account all trends and factors, their weight, in national and global economic life, that the high returns that delight insured persons fiduciaries are born.

In conclusion and from personal experience: a well-balanced team of fund managers in terms of age, qualifications, background and especially highly motivated in a modern corporate culture has a much better chance of lasting success, especially when working with great love for the profession: Happy Trifon Zarezan and Happy Valentine’s Day to all insured persons and colleagues!

______________________________ Special Reserve ____________________________

A description of the significance of the achieved rate of return and investment risk indicators

Nominal return – this is the return achieved on the management of a fund’s assets. It is calculated by dividing the difference between the value per unit of the fund valid for the last business day of the relevant year and the value per unit of the fund valid for the last business day of the previous year by the value per unit valid for the last business day of the previous year.

Standard Deviation – is a statistical measure of the dispersion of the values of a random quantity about its average or expected value. Standard deviation is accepted as one of the main indicators for measuring the risk of an investment portfolio.

Sharpe Ratio – an indicator that compares the returns achieved from managing an investment portfolio and the risk taken to achieve those returns.

The methodology for calculating the achieved nominal return and the level of investment risk is in accordance with Annex 15 of the „Regulation № 61/ 27.09.2018 of the FSC.

The investment policies of the funds managed by „PAC DallBogg: Life & Health“ are available on the Company’s website – https://dallbogg.bg, section „Investments“.

A description of the significance of the achieved rate of return, the level of investment risk, the methodology for calculating and the investment policy of the fund are available on the Company’s website – https://dallbogg.bg, section „Investments“/ „Rate of return and risk“.

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.

______________________________ Special Reserve ____________________________

A description of the significance of the achieved rate of return and investment risk indicators

Nominal return – this is the return achieved on the management of a fund’s assets. It is calculated by dividing the difference between the value per unit of the fund valid for the last business day of the relevant year and the value per unit of the fund valid for the last business day of the previous year by the value per unit valid for the last business day of the previous year.

Standard Deviation – is a statistical measure of the dispersion of the values of a random quantity about its average or expected value. Standard deviation is accepted as one of the main indicators for measuring the risk of an investment portfolio.

Sharpe Ratio – an indicator that compares the returns achieved from managing an investment portfolio and the risk taken to achieve those returns.

The methodology for calculating the achieved nominal return and the level of investment risk is in accordance with Annex 15 of the „Regulation № 61/ 27.09.2018 of the FSC.

The investment policies of the funds managed by „PAC DallBogg: Life & Health“ are available on the Company’s website – https://dallbogg.bg, section „Investments“.

A description of the significance of the achieved rate of return, the level of investment risk, the methodology for calculating and the investment policy of the fund are available on the Company’s website – https://dallbogg.bg, section „Investments“/ „Rate of return and risk“.

24 Jan The youngest universal pension fund DallBogg: Life and Health with its 10,08% rate of return for 2023

Larisa Borisova – Head of the Specialized Internal Control Service. Master in Accounting and Control. She reports directly to the Board of Directors. Ms. Borisova is a recognized expert with over ten years of experience in the pension industry and many years of experience in accounting, investment brokerage, finance and financial analysis.

The world is different today – full of threats, risks and opportunities
European communities face recession, a major war on the eastern frontiers, ageing populations, strong migration waves, rising poverty levels and persistent social inequalities. Pension systems are, at the same time and predictably, facing increasing budget constraints and deficits. There are also many new opportunities to increase productivity, innovation and discovery in the service of a healthy, facilitated and long life. Quick and proper orientation are crucial. Against this backdrop, in a relatively stable and growing economy, pensions offer opportunities to manage our retirement funds and savings with heightened expectations.All Bulgarian universal pension funds have reported positive returns in various amounts over the past year –FSC’s data.

Achieved returns by universal pension funds (UPF) in 2023.

Our choices today determine whether we will live like “Western European pensioners” tomorrow: it is time to look around and park our pension money where it is safe, where it is profitable!

And indeed, with the enviable 10.08% return achieved on the funds in the individual accounts of the insured persons in the ‘DallBogg: Life and Health’ UPF in 2023, we can hope that the distance with the Western Europeans is shortening for now. It is important that in the future our small, highly motivated and cohesive team is able to realise and report such and higher results for a number of years. With growth rates of 7-10-12% over 15 years, to take just one macroeconomic example, China has become the second economy in the world – far ahead of Japan and Germany. So at a microeconomic level, year-on-year returns are a key measure of how well the monthly compulsory additional pension contributions have been managed. However, the big prize comes when this high level is sustained over years. We are dedicated to this goal with the task of maintaining confidence and our attractiveness.

POD ‘DallBogg: Life and Health’ is the newest pension provider in the country and has only been operating for two years. We manage risk and expect it, which is why we say ‘your money never sleeps’. We invest in the world’s financial markets, exactly by the rules, while day and night literally change. So our members’ pensions and savings “work” now for their future wellbeing. Trust and exercised choice oblige and motivate us in this intense analytical and complex activity. The only timely activity that financially enlightened retirement savers, before they reach retirement age and after they are assigned to a fund, should decisively do is: their informed choice! And then only to monitor long-term returns.

2023 – PAC DallBogg: Life and Health’s year

Already only two years old, the ‘DallBogg: Life and Health’ AMP has managed to overtake all incumbent funds and companies in the country, where no new pension fund had been licensed for a full 12 years before. For us, the achievement is a great encouragement and a great responsibility to our members and all those who enthusiastically trust us and transfer their pension accounts. The past year 2023 was tense and at the same time heady with its downs and ups in the financial markets. A number of large funds abroad changed their strategy abruptly. In individual cases, these changes were as confirmation or encouraging evidence of the right course we had chosen. Over the past year, the assets of universal pension funds in this country have been invested in legally permitted investment instruments, and only the most far-sighted have been able to make the most of favourable times for transactions. Above all, the expert capacity of the funds’ management – their efficient management of the investment portfolio – is crucial. The ‘DallBogg: Life and Health’ UPF was particularly successful and managed to achieve the highest return among universal pension funds in Bulgaria for the year. We provoked universal admiration among our members, great interest among prospective clients and high levels of approval among unbiased observers.

In the harsh struggle with the high volatility of prices of financial instruments, the DallBogg: Life and Health UPF managed to achieve an enviable 10.08% yield on the funds in the individual accounts of the insured persons, who believed even more strongly in our expertise and spontaneously attracted new members to the fund.

However, the Bulgarian pension system in terms of funds raised relative to GDP is very small and is far from the OECD proportions we aspire to. Despite the improvements made recently, it can and should generally provide a more dignified old age for its current and future pensioners.

We are overwhelmed by a constant quest for development

PAC DallBogg: Life & Health constantly strives to improve the performance of its teams by developing individual talent and nurturing leadership skills especially in investment decision making. Material incentives, strictly limited by law, are more often replaced here by fostering a culture of constantly seeking and sharing knowledge and striving for innovation. The overarching organizational goal of these efforts is to build well-structured pension funds with robust controls, efficient investment of assets, and increased financial awareness of our current and future insured. We have begun to cultivate a lasting interest in our members in today’s global and national capital markets in order to awaken their interest in improving their long-term financial health by saving smartly for a third retirement. They should not be surprised at the middle or end of their working career by the financial outcome of their years of effort and savings. We were very saddened by the unanimous finding made from the rostrum of Parliament these days that almost all households whose homes are subject to renovation are struggling to invest BGN 5-6 000 for the 20% self-financing of renovation. At the same time, BGN 73 billion of people’s money is sitting on almost interest-free deposits in banks while the third – savings – pillar of the country’s voluntary pension insurance is desperately weak and undervalued as a source of additional stability and a guarantee-insurance instrument. Financial markets are volatile, so an important quality is the foresight of our investment team. High professional ethics, expertise and dedication to our members’ interests and investment goals are our greatest virtues.

______________________________ Special Reserve ____________________________

A description of the significance of the achieved rate of return and investment risk indicators

Nominal return – this is the return achieved on the management of a fund’s assets. It is calculated by dividing the difference between the value per unit of the fund valid for the last business day of the relevant year and the value per unit of the fund valid for the last business day of the previous year by the value per unit valid for the last business day of the previous year.

Standard Deviation – is a statistical measure of the dispersion of the values of a random quantity about its average or expected value. Standard deviation is accepted as one of the main indicators for measuring the risk of an investment portfolio.

Sharpe Ratio – an indicator that compares the returns achieved from managing an investment portfolio and the risk taken to achieve those returns.

The methodology for calculating the achieved nominal return and the level of investment risk is in accordance with Annex 15 of the „Regulation № 61/ 27.09.2018 of the FSC.

The investment policies of the funds managed by „PAC DallBogg: Life & Health“ are available on the Company’s website – https://dallbogg.bg, section „Investments“.

A description of the significance of the achieved rate of return, the level of investment risk, the methodology for calculating and the investment policy of the fund are available on the Company’s website – https://dallbogg.bg, section „Investments“/ „Rate of return and risk“.

09 Jan PAC DallBogg: Life and Health’s pension funds made an enviable return in 2023

In the first full calendar year of operations, the funds managed by PAC DallBogg: Life and Health achieved an impressive return.

Far-sighted management of investment portfolios brought 10.08% yield on individual accounts of the insured in the universal fund, 9.49% in the occupational fund and 9.34% in the voluntary pension fund.

______________________________ Special Reserve ____________________________

A description of the significance of the achieved rate of return and investment risk indicators

Nominal return – this is the return achieved on the management of a fund’s assets. It is calculated by dividing the difference between the value per unit of the fund valid for the last business day of the relevant year and the value per unit of the fund valid for the last business day of the previous year by the value per unit valid for the last business day of the previous year.

Standard Deviation – is a statistical measure of the dispersion of the values of a random quantity about its average or expected value. Standard deviation is accepted as one of the main indicators for measuring the risk of an investment portfolio.

Sharpe Ratio – an indicator that compares the returns achieved from managing an investment portfolio and the risk taken to achieve those returns.

The methodology for calculating the achieved nominal return and the level of investment risk is in accordance with Annex 15 of the „Regulation № 61/ 27.09.2018 of the FSC.

The investment policies of the funds managed by „PAC DallBogg: Life & Health“ are available on the Company’s website – https://dallbogg.bg, section „Investments“.

A description of the significance of the achieved rate of return, the level of investment risk, the methodology for calculating and the investment policy of the fund are available on the Company’s website – https://dallbogg.bg, section „Investments“/ „Rate of return and risk“.

09 Nov Savings in a voluntary pension fund are an investment in the future – ours, our children’s and grandchildren’s

Setting aside 10% of your monthly income to invest in an individual account in a well-managed pension fund allows your funds to grow by at least 50% in about 7-8 years.

Adopting a long-term savings strategy is a source of financial security, peace of mind and predictability. When we save wisely and prudently, without affecting the normal life of the family, we guarantee our financial “reserve” in case of unforeseen circumstances, investment emergencies or other important expenses. Despite the extra income available, accumulated holdings are a very big help to our finances.

Many people would describe their lives as quite ordinary, but with the right investments, they can do many extraordinary things, such as provide a better education for their children or extra tutoring for their talented grandchildren. All you need is consistency and good ideas.
The most important thing is saving regularly in a voluntary pension fund in small amounts relative to personal income.

Setting aside about up to 10% of your monthly income to invest in an individual account in a dynamic and well-managed retirement fund of your choice will allow the funds to grow by at least 50% or more over about 7-8 years, which is usually the length of an investment cycle. Of course, the most important thing is to balance between stable, low risk, and medium return investments when determining the investment strategy of fund managers. Pension funds invest in a wide range of assets that can help spread risk and mitigate the impact of market volatility. It is the balance between risk and opportunity that measures the professionalism of fund managers. The choice of pension fund is therefore very important.

With stable personal and family finances, the economic situation in Bulgaria today is particularly suitable for investment in a voluntary pension fund.  At present, Bulgaria is not yet in a recession and unemployment is low, while the euro area is experiencing economic stagnation and an increase in unemployment. Last week (3 November, ed.), Eurostat reported that in September unemployment in the 20 countries of the Eurozone (all EU members) reached 6.5% with 69,000 newly unemployed and a total of over 11 million people of working age. Wage growth on the other hand has kept inflation high. The European Central Bank cannot lower interest rates to fulfill its mandate and ensure price stability and limit appreciation to around 2% on an annual basis. The ECB predicts unemployment will rise to 6.7% in 2024 and GDP will stop growing and may even start to decline. Against this backdrop, Bulgaria stands relatively well without a huge industrial base and with many small and medium-sized enterprises producing parts and components or licensing goods to concerns that are again downsizing or cutting back their production in Western Europe.

Why choose a voluntary pension fund?

Supplementary voluntary pensions are funded through contributions, the frequency and amount of which you determine. They are paid into your individual account. The accumulation of the funds in this account provides an additional pension, which is received independently of the pension granted by the National Social Insurance Institution and the pensions from the supplementary compulsory pension insurance, and/or savings to be used at your discretion.

Supplementary voluntary pension insurance, through regular contributions, enables active Bulgarians not to fall into the situation of today’s pensioners. This will raise your pension income to the normal and generally accepted European levels of 75-85% of your last salary. The funds in your individual account are inheritable and not subject to enforcement (by a Private Bailiff). What’s more, this reduces the amount of income tax payable. Pursuant to Article 19 of the Personal Income Tax Act (ITA), the sum of the annual tax bases is reduced by the personal funds contributed up to 10 per cent of the sum of the annual tax bases. The return on the management of the funds in the account is not taxable. At the same time, the funds are available at all times and can be withdrawn relatively quickly without significant losses, unlike funds invested in real estate and equities.

In a highly competitive labour market, employers in Bulgaria are increasingly applying good European practices to incentivise their employees through social benefits, including regular employer contributions for the benefit of their employees. The Corporate Income Tax Act allows the employer to make any contribution, up to BGN 60, to an additional voluntary pension scheme tax-free and not subject to mandatory contributions.

Important information  from DallBogg

We recommend that your contribution amount is set as a percentage of your insurable income – this way it will increase automatically as your income increases.

You are also entitled to a tax preference at annual equalisation by making a one-off contribution of up to 10% of the annual taxable amount.

The flexibility that additional voluntary pension provision allows – how much to contribute and when to contribute it – increases the motivation for many not only to start contributing to a voluntary pension fund, but also to increase their contributions. This inevitably leads to an increase in individual account balances, which can support the wider economy – by injecting additional financial resources in the form of investment in sound, risk-based and legally permitted investments.

In times of economic uncertainty (inflation, unemployment and negative demographic trends), the money invested in a voluntary pension fund becomes a kind of insurance and a guarantee for the family’s normal life.

24 Oct The expert’s view: increasing contributions and tax relief will achieve real pension reform

• Angel Terziev has a master’s degree in social and insurance law. He is a certified, qualified actuary since 2007. A proven and established professional with more than 25 years of experience in pensions and insurance.
• He holds pension assurance management certificates and has completed a number of courses with the American Agency for International Development and the European Academy of Actuaries. He has specialized in health insurance in the United States.

Recently, a PensionsEurope 2023 confederation forum was held in Sofia on the topic “Prospects and Opportunities for the CEE Pension Markets”. The issue of increasing contributions to supplementary compulsory pension insurance took centre stage.
Already last year, DallBogg analysts drew attention to the need to increase contributions. The contribution to the universal pension fund has not been adjusted for more than 15 years, which in itself is a paradox, and a contribution of 5% of insurance income is absolutely inadequate against the background of galloping inflation, especially in the last two years.

The full interview is available here in Bulgarian.

09 Oct Т. Todorinski: DallBogg raises pension insurance culture in the country

The overwhelming desire and satisfaction to offer quality products and to work to raise the insurance culture in society never cease to inspire and motivate us. With the youngest pension company in the country as of the end of 2021, DallBogg is also contributing to expanding the choice of pension insured individuals and savers, as well as enhancing the pension insurance culture in the country. We take it as our long-term mission that Bulgarian citizens achieve high returns on their pension contributions through forward-looking investments in their own future.

The full interview with Todor Todorinski is available here in Bulgarian.

25 Aug The second pension should exceed the first pension: Here’s how

Quite realistically, the amount paid under the second pension, other things being equal, such as the pensionable period and the amount of contributions, could exceed the amount paid under the first pension. The creation of second and third pillar pensions also has this objective – by making the additional funds collected – compulsorily or voluntarily – available for management by professional fund managers, who are expected to invest far-sightedly and provide higher returns for pension beneficiaries. In other words, “you will know them by their returns” – this is the global criterion for selecting and evaluating supplementary pension funds. One obvious example in Bulgaria:

“DallBogg: Life and Health” Pension Assurance is the newest licensed participant in the pension insurance market and has only been operating for a year and a half. Despite the short period, as of 30 June 2023 (first half of the year), the company has won the trust of more than 16,000 insured persons in its three funds: Universal Pension Fund, Occupational Pension Fund, Voluntary Pension Fund.

Precisely because it was created to provide higher second pensions to its trusted depositors, the company invests the accumulated funds in the individual accounts of insured persons with great care and advanced market and financial expertise. In compliance with all regulatory requirements and with constant attention to geopolitical, macroeconomic and investment developments, the fund managers at DallBogg Pension Insurance have achieved remarkable results for a Bulgarian company on the world stock exchanges.

According to the website of the Financial Supervision Commission, for the period from 01.01.2023 to 30.06.2023. The company reported an impressive positive return on assets under management of the Universal Pension Fund “DallBogg: Life and Health” in the amount of 6.83%, the Occupational Pension Fund “DallBogg: Life and Health” in the amount of 6.53% and the Voluntary Pension Fund “DallBogg: Life and Health” in the amount of 5.75%.

As of 30.06.2023, a significant growth is also observed in the net assets of the funds managed by the Company, according to the statistics published by the FSC. According to the disclosed data, the net assets of the Universal, Professional and Voluntary Pension Funds of DallBogg: Life and Health have increased by 57%, 164% and 59%, respectively, compared to 31.12.2022, the previous year ended.