Две пенсии или една? (When Two Pensions are Less than One)

20 Pages Posted: 4 Mar 2016 Last revised: 26 Mar 2017

Date Written: March 1, 2016


Bulgarian Abstract: Съгласно влезлите в сила на 1.01.2016 г. изменения и допълнения на Кодекса за социалното осигуряване (КСО) родените след 1959 г. могат да избират да се осигуряват в универсални пенсионни фондове (УПФ) или не. При осигуряване в УПФ те получават право на две пожизнени пенсии – от УПФ и намалена от държавното обществено осигуряване (ДОО), а при отказ от осигуряване в УПФ – право на една пенсия от ДОО в пълнен размер.

Конструираме “уравнението на безразличие”, за да отговорим на въпроса “При какви условия две пенсии са равни на една?”. Пресмятаме пенсиите на мъж и жена при сценарий, в който параметрите на пенсионната система остават постоянни в течение на 40 години. Установяваме, че:

1. За да се постигне равенство на две пенсии на една, доходността на осигурените в УПФ трябва да изпреварва темпа на нарастване на средния осигурителен доход за страната и

2. През периода 2002-2015 г. действителната доходност, получена от осигурените в УПФ, изостава значително от темпа на нарастване на средния осигурителен доход за страната за същия период.

3. Продължаването на тази тенденция означава, че очакваният размер на пенсия от УПФ няма да компенсира намалението на пенсията от ДОО и сумата от две пенсии по необходимост ще е по-малка от пълния размер на пенсията от ДОО.

English Abstract: The dominant pension product on the Bulgarian market is the UPF (universal pension funds). As of end-2015 privately owned and operated UPFs manage the equivalent of €3.9 bln. in 3.5 mln. accounts (the total population of Bulgaria is 7.2 mln.) The reason for UPFs “popularity” is the mandatory participation requirement in those funds for employees born after 1959, introduced in 2002. Since August 2015, however, participants can opt out of the UPF. Those who choose to opt out will have the right to a full pension from the public pay-as-you-go pension scheme. Those who remain in the UPF will receive two pensions, one from the public scheme and another form the UPF.

There is a catch, however. The public scheme pension for UPF participants will be reduced due to the fact that they invest part of their pension insurance contributions into an UPF. Thus, to make a rational decision whether to opt out of the UPF or not, pension savers need to estimate whether their UPF pension will offset the reduction of their public pension or not. 

In this paper I derive the necessary and sufficient conditions for the private pension from an UPF to fully offset the reduction of the public pension and thus make the sum of two pensions equal to one pension from the public scheme only. The results are as follows: 

1. The necessary and sufficient condition for the equality of two pensions to one is that the return on savings in the UPF exceeds the growth of the average insurable income over the entire working career of the insured.

2. Historically, the opposite has been the case. The annual average real return after fees of the insured in UPFs was 0.53 % between 2002 and 2015, while the average insurable income in Bulgaria grew by a real annual average of 4.45 % over the same period.

3. The gap so far is so large, that it is unlikely for the UPF returns to catch up with the growth of the average insurable income in the future. Moreover, required future UPF returns are incompatible with the investment risk they are allowed to take under the law.

4. Therefore, participants who remain in the privately managed UPF are certain to receive two pensions the sum of which is likely to be smaller than the pension they would have received from the public scheme had they opted out of the UPF.

Nevertheless, the default option for participants entering the labor market for the first time is to join an UPF.

Note: Downloadable document is in Bulgarian.

Keywords: pensions, pension funds, Bulgaria, real return

JEL Classification: G23

Suggested Citation

Christoff, Lubomir, Две пенсии или една? (When Two Pensions are Less than One) (March 1, 2016). Available at SSRN: https://ssrn.com/abstract=2740262 or http://dx.doi.org/10.2139/ssrn.2740262

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