Boryana Simeonova: The Voluntary Pension Fund is an opportunity to maintain financial independence after retirement

"The role of pension funds, and more specifically the Voluntary Pension Fund, for a higher standard of living for people after retirement is great. That is why it is important for young people to make their reasonable and long-term investment decisions on time. If they start saving today, they will maintain their financial independence after retirement". This was stated by Boryana Simeonova, Director of the Branch Network of PAC Doverie, at the first edition of the "Longevity Forum", organized by "Capital", which was held on April 10 at the Grand Hotel Millennium Sofia.

The event focused on the topic of "longevity economics". Zornitsa Rusinova, Chairperson of the Economic and Social Council (ESS) and former Minister of Social Affairs, as well as Maria Mincheva, Deputy Chairperson of the Bulgarian Industrial Chamber, also participated in the discussion.

Simeonova emphasized that the earlier one starts saving in the Voluntary Pension Fund, the larger the amount will accumulate in the individual account of the insured person, and this will allow him to be calmer, to enjoy the well-deserved freedom, his hobbies and moments with his loved ones.

She also gave a specific example - if a person contributes 200 BGN per month for 40 years, with a net yield of 5%, then over 288,000 BGN will be accumulated.

In addition, insured persons in the VPF can benefit from a tax relief of up to 10% of their annual tax base and do not owe taxes when withdrawing funds when an insurance event occurs. The funds from personal contributions are available at any time and the persons for inheritance are selected, depending on preferences. 

"The introduction of the multi-fund system in the coming years will allow pension companies to offer people the opportunity for higher incomes, as insured persons will be able to transfer their funds to funds with different management dynamics", explained Boryana Simeonova.

The Director of the "Branch Network" at PAC Doverie emphasized that the topic of income remains important, because in Bulgaria over 90% of them come from salaries or pensions. Nearly 60% of income is from salaries, and 30% from pensions. 

Demographics are one of the main prerequisites for the problems facing the country's pension insurance system, Zornitsa Rusinova said. 

According to her, the average life expectancy in Bulgaria is significantly lower than in other European countries. 

“Bulgaria is still almost at the bottom in terms of poverty levels. There is a clear need for more efforts to increase the financial literacy of the population, especially young people”, added Rusinova. 

According to her, the education of financial literacy should start from an early age. Educational systems should provide an opportunity to build such skills that will support the next generation not only in life, but also as a step towards the labor market. Rusinova also explained that in order to be able to develop multi-funds well, the first step for Bulgaria is to become a full member of the eurozone. 

“A broad political and public consensus is needed regarding the pension model”, said Maria Mincheva, deputy chairperson of the Bulgarian Industrial Association (BIA). 

BIA proposes to increase the number of people insured in the third pension pillar, because the data as of the end of 2024 show that over 4 million people are insured in universal funds, about 630 thousand people in additional voluntary funds, and under 10 thousand in professional schemes. Mincheva pointed out that by the end of the year we expect many initiatives aimed at the retail market and how citizens invest their savings, and here the role of pension funds is quite large. 

During the forum, PAC Doverie had a special stand, where experts consulted visitors about pension products, personal accounts of insured persons and estimated calculations for their pension payments.