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The first pensioners with the so-called second pension may renounce it 1 year before their retirement, and not 5 years before, as is the case with current legislation.
This provides for a draft amendment to the Social Security Code, published for public discussion by the Minister of Social Affairs Denitsa Sacheva.
These are those born after December 31, 1959. Part of their contribution to social security must be set aside and entered into a private pension fund. There are more and more voices that the first pensioners with the so-called second pension may be harmed because their personal accounts at UPF have not accumulated sufficient funds and in practice when they retire and receive a pension from the NSSI plus a pension from the UPF, they would receive a lower amount than if they had only been insured with the NSSI, which led to the decision to allow the authorities to transfer their accounts if they so chose. (The first insured of the second pension pillar will be entitled to a supplementary life old-age pension in 2021 for women and in 2024 for men.) As some of them have already lost the current five-year period until their retirement, in which they can make this decision, the code is modified, which reduces the term to 1 year.
This 1-year period does not apply to all future retirees. It is intended for people reaching retirement age. from 2022 to 2025 inclusive, you have the right to move within 1 year before retirement. This period will gradually increase until 2038., when the insurance may change no later than 5 years before reaching retirement age.
In this way, the first groups of insured are guaranteed a longer period to learn about legal changes. It also gives them the opportunity to make a more accurate assessment of the amount of their future pensions based on the funds accumulated in their individual accounts in a period, as close as possible to retirement ”, motivate the change by the Ministry of Labor and Social Policy.
The changes in the code also have to do with something else: what to do with the money for a second pension for those who remain insured in a private fund. In this sense, the team of the Minister of Social Affairs Denitsa Sacheva offers three options.
The three types of pension products are:
– lifetime old-age pension;
– deferred payment of funds in the individual account;
– one-time payment of funds in the individual account.
A lifetime old-age pension is expected to be paid when the amount of the insured’s pension savings in the second pillar allows the granting of a lifetime old-age pension for an amount not less than 15% of the amount of the minimum pension for seniority and seniority. The insured will be entitled to a supplementary lifetime old-age pension upon reaching the age of acquiring a pension for seniority and seniority. Retired applicants will be able to exercise this right for 1 year before reaching the years of RSC, but only if the funds in their individual account allow them to receive an additional life pension in an amount not less than the minimum. seniority and old-age pension. The guaranteed amount of the supplementary lifetime old-age pension may not be less than that calculated on the basis of the amount of the gross amount of the insurance contributions transferred by the National Revenue Agency and the National Social Security Institute for the respective insured.
The supplementary lifetime old-age pension can have a guaranteed payment period. It can also include deferred payment of part of the funds until reaching the age chosen by the pensioner. In these cases, the term and the amount of the deferred payment, as well as the amount of the life pension, are chosen by the insured.
The deferred payment of the funds from the individual account of the insured in a universal pension fund will be possible when their value is not sufficient to grant a life pension, but exceeds three times the minimum pension for seniority and seniority. In this case, the monthly payment may not be less than 15% or more than the minimum pension for seniority. The guaranteed amount of the deferred payment is equal to that calculated on the basis of the gross amount of the insurance contributions transferred.
In limited cases, where pension savings are not sufficient to ensure deferred payment, a one-time payment is provided from funds in the insured’s individual account. This will happen when the funds in the individual insurance account are less than three times the amount of the minimum pension for seniority and seniority.
In the event of the pensioner’s death, his heirs are entitled to the funds owed if the selected product is a life pension with a guaranteed repayment period. The funds will also be inherited in case the pension is paid in the form of a deferred payment.
The bill proposes at the time of the insured’s retirement, their individual account in a universal pension fund will be closed. The funds accumulated in your individual account will be transferred to a special general fund for the payment of life pensions. “This allows guaranteeing both the lifetime character and the amount of the pension payment of each pensioner, regardless of the cases of long-term pensions or unfavorable investment results,” wrote the MLSP.
Changes have also been made to the provisions that regulate the reserve of pension insurance companies.. They stipulate that to cover the shortage of the life pension payment fund, the pension insurance company creates a reserve to guarantee the payment of life pensions.
