Pensioners ‍Paid Millions to Buy Internship for Retirement

Potential pensioners in​ Bulgaria ⁢paid ⁤almost BGN 5.3 million to buy an internship for a ⁢pension ⁢in the‌ first ⁤six ⁢months of this year, according to a report by the⁤ National Institute of Social Sciences.

According to​ the organization’s plans, Bulgarians are expected to pay almost BGN 20.6 million in ⁤contributions in order ‌to retire⁣ this year. For the period‌ from January to​ March this year, almost BGN 4.439 million was⁣ received in the budget, and the average length‌ of service​ of these⁢ people was almost two years – 23 months.

Last ⁢year, a total of⁢ 4,707 potential pensioners paid BGN 32.8 million to‍ retire, ⁣and in 2022, 4,093 people ‍did so ⁤and it cost them⁣ BGN⁣ 24.43 million. The amount for a month of lost experience is 19.8% of the ‍minimum insurance income, ⁢which has risen ‌to⁣ BGN 933 since⁣ the beginning of this year.

As a⁣ result, a⁤ month‌ of internship currently costs BGN 184.73, and a year costs BGN 2126.80. For the entire period of five years, ​the applicant-pensioner must ‌pay BGN 11,084.

Transfers from Private ⁢Pension Funds

More than⁢ BGN 28 million ⁤has been transferred from​ private general pension funds to ​the budget​ of the National Insurance Institute, indicating that these individuals have given up their second ⁣pension and will receive only the state pension.

The insurance organization expects the amount of transferred funds to reach BGN⁣ 80 ⁤million‌ per year.

State ⁤Fund for Guaranteeing the Sustainability of the‍ State ⁣Pension‍ System

At ‍the end of last year,⁤ the State Fund for Guaranteeing the Sustainability of the State Pension ‍System, also⁢ known as​ the⁢ Cash Fund,​ had BGN⁤ 3.904 billion. In 2023, BGN ⁣99.7 million was transferred from/to the central budget due to the State Fund,⁢ and interest in the amount⁤ of BGN 108.8 million was received⁤ on‌ the‌ account of​ the fund.

Pension Expenditure Projections

After 2025, pension expenditure as⁣ a share of GDP is expected to fall,⁢ reaching its lowest value ⁣of 9.6% in⁤ the period 2042-2047. It‍ is ⁣then expected to rise to 10.0% in 2060, ⁤followed by a slight decrease to 9.9% at the ⁢end ​of the forecast period.

Insurance Options for Individuals

Individuals insured ⁣in ‌a general⁤ pension fund have the⁣ right ‍to choose to change‌ their insurance from a general ⁢pension fund to a “Pensions” fund, with a higher⁣ insurance ⁣contribution in the amount ⁢of the insurance​ contribution for ‍a general pension fund.

This option is also ‍available ⁤to those insured in a⁤ professional pension fund, ⁣with the amount of funds‍ transferred‌ amounting to ​more than BGN 5.40 ​million.

The ⁢National Insurance Institute also received ‍interest‍ income​ from overdraft pensions, unemployment‌ benefits, and sick leave.