Legislative Ambiguity, Ignorance And Poverty Excruciate The Third Pillar
The net assets of all the three types of superannuation funds- universal, voluntary and professional- amounted BGN 1 262 236 thousand, by June 30th, reads the FCB report on the activity of the
superannuation funding companies during the first six months of 2006. The net assets have augmented by 34. 4%, as compared to the same period of 2005. On the grounds of the up- to- now augmentation
it is possible that the expected annual assets amount of a billion and a half million levs can be achieved; and if there are no serious impact the amount should come up to BGN 4 billion in 2010.
Presently the universal funds hold assets amounting BGN 544 476 thousand (i.e. 43. 14% of all the assets), the professional funds- BGN 273 153 thousand (21. 64%), the voluntary funds- 444 607 (35.
22%). The number of insured individuals has risen by 8. 5%, during the first half of the year, numbering 3 085 082 citizens. The market is still concentrated, as it was in 2005. Doverie is still
the leader, 37. 75% of the insured individuals are its customers, Allianz Bulgaria is next- 25. 01% followed by Saglasie- with an 11. 37% market share. AIG and DSK- Rodina occupy the fourth and
fifth place with respective market shares of 8. 28% and 7. 12%. CKB- Sila and Lukoil Guarant Bulgaria have one and the same market share of 4. 36%. Last comes DZI with a share of 1. 75%.
The number of citizens insured by the universal funds count 2 338 864 people (75. 81% of all the insured individuals), 188 377 (6. 11%) are the customers of the professional funds, 557 841 (18.
08%)- of the voluntary superannuation funding companies. The results are on the whole positive. The assets of the companies have risen by BGN 155 million (more than one third for a year) and the
number of the insured exceeds three million, said Mr Nikola Abadziev, chairman of the Voluntary Superannuation Funding Companies Association. 2006 was announced to be the year of the voluntary
additional superannuation funding, as Cash Paper wrote earlier. The metier idea was to advertise the superannuation saving as a guarantee for untroubled old- age days. The first Doverie (i.e.
trust) television commercial was broadcasted in the end of 2005, encouraging the citizens to deposit superannuation savings. Half a year later only 7 990 individuals have invested in the third
superannuation pillar. The review shows that in 2002 the number of the voluntarily insured counted 484 791 people, in 2003- 516 148, in 2004- 535 416 and in the end of 2005- 549 851 people. The
number of citizens choosing to deposit superannuation savings is decreasing by the year, those who trust the third pillar are only one sixth. Mr Abadziev says there are several reasons for the
unsatisfactory results, one of the main is the law. There is a suggestion that people working are to deposit 10% of the maximum insurance income without any taxation. This year the maximum income
amounts BGN 1 400, i.e. the deposit amounts BGN 140, said the Association chairman. The deputies should consider the situation with the citizens born before 1959, who do not avail themselves of the
second pillar- compulsory additional superannuation funding. We want these people to be allowed to deposit up to BGN 280 without taxation, said Mr Abadziev. The law has not passed its second
reading, though. Other reasons for the low number of the insured citizens are the low interest and the lack of information. The main reason is poverty. The figures show it themselves. The average
monthly deposits (in all of the voluntary superannuation funds) amount BGN 47. 41 and the average accumulated amount per person comes up to BGN 797. 01.
