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.

  • 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.

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.

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.

“DallBogg: Life and Health”, which has been in existence since May 2021, has almost doubled its customers in the first half of this year. In December they were 6,588 and in June 2023 they are now 11,021. It also had the highest receipts of social security contributions on average per person for the half-year period.

The full article can be read here in Bulgarian.

Three generations of experts in insurance and pension fund development: Todor Todorinski – Executive Director; Maria Mineva – Head of General Insurance Department; Nikolay Sotirov – Member of the Board of Directors

(collective answers to Maria Kouzmanova)

– We live in times of rapid change and constant technological evolution. How fast can a company grow in relatively conservative sectors such as insurance and retirement savings?

– The short answer is: as fast as it fully absorbs and exploits the vast theoretical and applied knowledge in the sector and keeps pace with the advances of the digital revolution. Since its establishment in 2008 as a health insurance company, DallBogg has reached a leadership position in just 5 years. Since then, we have been preparing for the unbundling of the National Health Fund, and in the meantime, in 2013, we expanded our license as an insurance joint stock company with a primary focus in general insurance and offered products in over 10 insurance classes – motor insurance, property, casualty, surety, liability, transportation and agricultural insurance. We have virtually stopped the advance of age and have remained forever young and in demand. After obtaining the license for the compulsory motor third party liability (MTPL) insurance in 2014, DallBogg achieved remarkable results in a record period – from 8125 policies in the same year, in 2015 we have already reached over 89 thousand, or almost 12 times more, to exceed 255 thousand policies in 2018. Since then, DallBogg has been among the leading insurers in Bulgaria, and to date we are firmly in the top three with over 515 thousand policies.

In 2015, our entry into new European markets also began – we have effectively launched operations in Greece, have a solid position in Italy and Romania, and have recently expanded into Spain and are growing in the Polish market. We are diligently preparing to enter Europe’s most competitive market – Germany – by the end of the year. At the same time, we have permission to operate in 10 more EU countries. Thus, in this otherwise conservative market, thanks to the knowledge and deep true continuity within the company, we have built and preserved over the years our impeccable reputation and the DallBogg brand has become highly recognizable in the sector, both at home and abroad. Our excellent performance and perfect capital adequacy have earned us the respect of regulators and the trust of customers on the one hand, and the strong support of our partners, including leading reinsurers such as SwissRe, MunichRe, AXA.

In mid-2016, we obtained a Guarantees insurance licence and here too the growth was not delayed – the premium income at the end of that year was only BGN 1,634 and BGN 20,673 in 2017 and already BGN 646,736 in 2018 to reach the impressive BGN 89 million total income for the last three years. These results have brought us into the top three insurers offering this important insurance for business development, especially in attracting large investments and the construction of key infrastructure projects for the country.

With the establishment of the DallBogg: Life and Health Pension Assurance Company in 2021, whose three pension funds achieved impressive returns in the first quarter of this year alone, DallBogg’s non-banking group has made the country’s financial sector very attractive to savers and investors. This is the only way the geopolitical and other challenges can be overcome, because otherwise our, the citizens’, inactive financial attitude to everyday life leads only to an unhindered, centralized and patriarchal – non-market budgeted – national economy: weak economy, weak nation.

– You really have a wide view! The dynamic development is also impressive, and what is the real recipe for success?

– Excellent financial discipline, strict adherence to sector regulation and general legislation, a linear profitable and flexible structure, investment acumen, a company culture of success with constant training of young professionals and development of competent creativity, management strictly based on expertise and predictability. Over the years, we have remained true to our spirit of openness and respect for client needs, along with a constant drive to provide well-informed choices within a competitive insurance and now retirement savings market. We have our feet firmly planted on the ground and have dreams for centuries to come: every day we are inspired by the constant challenges of team play and continuity – the experienced management and maturity of our veteran experts combine with the drive and modern solutions of our younger ones. Last but not least – the positive attitude on the implementation of new technologies. Because technical innovations have long been no longer just adding value to the services in the insurance sector, but in fact determining its growth and development. In recent years, the logic of the digital world, mobile networks, GPS devices and social media have had a huge impact on the way we communicate with our customers, research and respond to their needs, store, process and use information, process insurance claims – with much greater speed and accuracy.

– Clearly not afraid of European and global competition in Bulgaria! Is it true and if yes – why?

– We are naturally afraid, we are normal and honest, that’s why we mobilize – a few “fighting” millions against many but unorganized billions! We believe that is why every stone weighs in its place!

Imagine a near future of market capture and organized, intellectual and inspired supremacy! Regional entrepreneurial enterprises will never be surpassed in profitability and flexibility, in management dedication and honesty – this is recognized on Wall Street, in the City of London, in Frankfurt and Paris, in Singapore and Tokyo and even in Hong Kong, now China!

– How do you see the future of the sector going forward?

– With the rise of digitalisation and advances in data collection and analytics, insurance companies can better understand their customers and contribute to the modernisation of the country. In addition to anticipating inflation’s emergence from the darkness of unpredictability earlier than many, we are increasingly providing customised insurance products tailored to individual needs, risks and preferences – the customer receives optimally tailored coverages, terms and services. Our advice and requirements in each specific context often help increase productivity in individual businesses. In short, the future includes customised insurance and especially pension products, retirement savings for the modern man and his entrepreneurship.

Although the NZIA (Net Zero Insurance Alliance), established by the UN two years ago, is about to collapse due to the withdrawal of major insurance companies, we are convinced that the “green transition” cannot stop and must continue, supported by all legal means and forms.

Advanced algorithms can handle tasks such as coverage recommendations, risk assessment and fraud detection. This means faster and more accurate service at an affordable price. The so-called “Internet of Things” (IoT) is at the heart of the digitalisation of the global economy. Data collected in real time through electronic tags, sensors and cameras could be used in various types of insurance – health, export and especially pensions. For example, wearable technologies could monitor health parameters, telematics could assess driver behaviour in car insurance, and smart home devices would help us detect potential risks such as fire or water or gas leaks. We are well ahead in investment solutions thanks to our dedicated specialists in our Bulgarian and overseas offices.

Blockchain technology is also increasingly entering our work. The features of a transparent, decentralised digital register of traceable data, the so-called “blockchain trail”, are becoming part of the toolkit for fraud prevention, contract verification and claims. This technology has already shown us more than promising possibilities for creating a decentralised, transparent and efficient system for managing insurance processes – we are working towards wider implementation.

– And what is AI’s role in your field? Will you be cutting jobs?

– Many aspects of the insurance and pensions industry, from underwriting to claims processing or from savings to second pensions, can be automated using AI and machine learning. Telemedicine is entering, on a serious scale, with increasing success. This is helping to reduce costs, increase efficiency and limit human error. AI can automate the claims process, making it faster and more efficient. It can analyze damage in photos, understand the extent of damage, and even determine the appropriate amount to pay out.

Since its inception, DallBogg has continuously increased company employment with the discovery and development of talented, highly skilled and well-paid jobs. There is only growth and prospects that dictate this trend to continue – not only because the applications, direct regulation and “fine-tuning” of AI for various walks of life, including insurance, have yet to be more precisely developed, but also because our employees are in a constant mode of training and refinement to utilize, not be replaced by, AI’s potential, which in any case seems great:

  •    Detecting insurance fraud in Bulgaria and in Europe: AI can analyse vast amounts of data to identify patterns and detect fraudulent behaviour. It can recognise inconsistencies in claims data, alert investigators to suspicious behaviour.
  •    Risk assessment: algorithms can use large datasets to more accurately determine the level of risk in an individual area of activity or in relation to a particular person or business. Together with the skills and experience of risk specialists (actuaries), we will be able to set premiums more fairly because we will know clients and partners even better.
  •    Better customer service: AI chatbots can respond to customer queries 24 hours a day, 7 days a week, providing immediate assistance. AI can also personalize recommendations based on individual customer data, which improves the customer experience, including reducing cost, increasing trust and the relationship with the company.
  •    Discovery and development of new niche markets: a large part of the population in the Balkans (Greece, Bulgaria, Romania), millions of people insure themselves against risks only when it is absolutely mandatory by law (similarity in mentality, despite serious language differences) and therefore, with unpredictable climate changes and cutting-edge ventures, they increasingly find themselves in difficult financial situations. AI will greatly help to develop personal risk assessment and elevate the health, financial and insurance culture of large populations.

Of course, we would very much like to see higher education in Bulgaria reformed towards and with a strong focus on STEM (Science, Technology, Engineering & Mathematics). Society and we still have a lot of work to do to create and implement a regulatory framework that ensures AI takes into account the ethical implications and complexities of each individual situation, such as fears around data storage and privacy.

But one thing is certain: the future is already here and we are building it.

According to the CEO of PAC DallBogg: Life and Health, it is a time of crisis now, but in the long term the money in pension funds is protected

One of the worrying mantras that has been circulating recently is that, as a result of the serious crises Bulgaria is facing, pension money from the funded pillars of the pension system is melting away, that citizens are losing their stake.

– Is this true, Mr Terziev?

– Investments in voluntary pension funds are long-term savings. That is why returns must be viewed in the long term. We are currently in a period of several simultaneous crises. It is also logical that there should be a reduction in the amounts in the funds. But usually the rate of increase after a crisis is significantly faster than the rate of decline during the crisis. One of the assets in which funds invest the money they accumulate is government securities. We are currently observing a decline in the value of government securities in numerous countries – in some places by more than 50%. And this is considered one of the safest investments.

Probably due to the collapse in the prices of this type of securities, the third quarter of 2022 demonstrates a change in the investments of universal pension funds. The share of debt securities of sovereigns and international financial organisations remains the largest, but as of the end of September it has decreased to 53.17% compared to 55% in 2021. The share of investment in equities rose to 35.32% from 33.18% a year earlier, while corporate bonds fell to 8.79% from 9.51%.

The war in Ukraine is further worsening the situation – the European economy is slowing, inflation is rising. We have record inflation for the last 2 decades.

However, it must be borne in mind that this is a momentary situation. If you analyse the last 10 years since pension funds exist, their returns have been positive. The funds have the capacity to come out positive.

– What is being done to minimise the damage from the crisis?

– At a time like this, ports of stability are being sought. The stock market reacts to different news and as a result there are price spikes, which funds try to capture to protect people’s money.

The legislator has provided full protection for the funds and gross contributions that insured persons put into the second pillar. That is to say, companies and pension funds will never pay out less than each insured person’s investment. Everything else will be additional income.

And this again makes the funds a safer haven for people’s investments than bank deposits, as only amounts up to BGN 196 000 are protected there.

– What is the solution?

– Equity schemes are one of the best investment alternatives at the moment. If people save for a third pension from the start of their working lives, they are likely to have peace of mind when the time comes to retire. But even by then, the money saved could prove to be a valuable resource in the event of an emergency or simply as a means of preserving earned money from inflation. Currently, an investment in an equity retirement plan may be considered a more efficient investment than one in real estate or a bank deposit. If a person needs funds, he cannot sell a room of his investment home urgently, but he can withdraw some of the funds in his personal retirement fund account. Moreover, without losing, as would happen if he withdrew money from a bank deposit before maturity. Accounts in supplementary pension funds are personal and can be inherited.

– Are the advantages of supplementary pensions clear enough for people?

– The superannuation sector has seen remarkable developments in the last three years. The investment portfolios of pension funds are well structured and highly diversified, with adequate reserves to guarantee the payment of lifetime pensions.

Pension fund assets are subject to daily monitoring by the FSC. And the supplementary pension business is one of the most tightly regulated.

– How can this type of saving be made more attractive?

– Legal changes are needed to make this type of saving more attractive. Under current legislation, monthly taxable income is reduced by personal contributions made during the month on behalf of individuals to voluntary pension insurance if they amount to 10 per cent of that income. In this way, the income tax payable by individuals is reduced and almost one third of the contribution is on account of the tax saved.

For sole traders, the taxable income formed under the TCGA is reduced by the personal contributions made for voluntary pension insurance up to 10 per cent of that income. The relief is available when filing the annual tax return.

For persons exercising liberal professions (architects, lawyers, general practitioners, etc.), the taxable income reduced by the statutory expenses is reduced by the personal contributions made for voluntary pension insurance up to 10% of this income. The relief can be claimed both in advance and annually when filing the tax return.

The same applies to persons employed under management and control contracts as well as under civil contracts – the taxable income reduced by the legally recognised expenses is reduced by the personal contributions made and the relief may be claimed both in advance and annually when filing the tax return.

This norm has not been changed for more than 10 years. Increasing the tax relief percentage would motivate more Bulgarians to invest in equity schemes – and this would make them independent after retirement. Moreover, these people would not rely on the pension system, and when they need more money, they would turn to the funds accumulated in their own pension account. This money, in turn, would return to the economy in the form of investments.

It is a curious fact that even the rulers in China have seen through the benefits of funded schemes. Recently, the population there has been allowed in certain areas to invest in pension funds. Because this is an investment in the future.–Uvelichenie-na-danachnoto-oblekchenie-bi-napravilo-investitsiyata-za-vtora-pensiya-po-zhelana/305726/4/0

On 23.06.2022, with the signing of the first contract for payment of an additional lifelong pension to a person insured in the Universal pension fund „DallBogg: Life and Health”, the Board of Directors of Pension assurance company „DallBogg: Life and Health” took a decision to establish a Lifelong pensions payment fund „DallBogg: Life and Health”.

Today, by Decision №546-FIPP dated 30.06.2022, the Financial supervision commission entered Lifelong pensions payment fund „DallBogg: Life and Health” in the register under Article 30, paragraph 1, item 13 of the Financial supervision commission act.

The amount of the monthly payments cannot be less than 15 percent of the minimum amount of the retirement pension under Article 68, paragraph 1 of the SIC.

The rules of Lifelong pensions payment fund „DallBogg: Life and Health” can be found here.

Just a few months after the legislative changes came into force and the payment of the additional pensions from the second pension pillar started, we are proud of the trust placed in us.

The youngest pension assurance company in Bulgaria – „PAC DallBogg: Life and Health“ has signed its first contract for payment of supplementary lifelong pension.

Our client has an accumulated amount in her individual account at the Universal pension fund „DallBogg: Life and Health” that gives her the opportunity to make a choice between the three types of life-long pensions and she decided to have a pension including deferred payments of her funds.

We wish her good health and let her smile and unceasing energy be her longtime partners in her golden years.