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Bulgaria:
Pension developments
The Bulgarian parliament has recently adopted a law under which a state agency to regulate pension insurance companies will be set up. At present, there are eight financial organisations that operate as pension funds and these companies will have to re-register and adhere to the new capital requirements for establishing a pension fund that the new legislation introduces. These have been set at a relatively high level (Lev 3 billion) to discourage the small funds that could become financial pyramids. Additionally, to retain their registration, new funds have to acquire a client base of over 10,000 within two years of starting operations. There is no bar to foreign companies. As regards investment, a limit of 5% of total assets in any one company is being imposed; this can be increased to10%, if ministerial consent is obtained.
Another a recent development designed to act as a stimulus to voluntary pension insurance is a government decision to give all Bulgarians over age 18 investment vouchers with a nominal value of Lev 250,000. These vouchers can be exchanged for equity at rate of one for two if invested in pension funds that will use the funds to invest in the second wave of privatisation.
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