No risk for the money of the insured
The pension funds in Bulgaria also suffer the negative effects of the world financial crisis. But every pension company is obliged to form a reserve fund from own resources in the amount of 1 percent of the assets under management. Those reserves are used to compensate the yield should its rate fall below the minimum determined by the Financial Supervision Commission. What I am now going to say may sound outrageous, but at the time when in the whole world, including here in Bulgaria, many investments brought negative return of minus 40-50-60 percent, the pension funds achieved a positive yield of 2 percent. This is more than good. Even if the crisis lasts longer there is no risk for the money of the insured in the long run. Because the time horizon for our clients is long, the first pension from the general pension fund will be granted as late as the year 2015 and by that time the shock will be compensated.