State Fund for Guaranteeing the Stability of the State Pension System
The State Fund for Guaranteeing the Stability of the State Pension System (SFGSSPS) has been established pursuant to the Transitional and Final Provisions of the 2006 State Budget of the Republic of Bulgaria Law. At the end of 2008 the National Assembly (NA) adopted a Law on SFGSSPS and its implementation was assigned to the Minister of Finance.
The Fund's objective is to foster and guarantee the sustainability of the state pension system. This is achieved through allocation of certain revenues from the state budget for a period not less than 10 years. The resources of the Fund are an independently separated part of the central budget and respectively part of the fiscal reserve. Some of the proceeds in the Fund are regulated with the Transitional and Final Provisions (TFP) of the State Budget Law for every year, Decrees of the Council of Ministers (DCM) and resolutions of the National Assembly. The proceeds in and the deductions from the Fund are regulated by the Law on SFGSSPS (article 1, paragraph 4 and article 11) and article 129, paragraphs 12 and 15 of the Social Security Code (SSC).
Data on the changes in the cash flows on the Fund's account with the BNB is published on the website of the Ministry of finance (minfin.bg, banner SFGSSPS, Statistical Data, Reporting data on the Silver Fund) on a monthly basis.
The accrued proceeds in the SFGSSPS are formed as follows:
In pursuance of § 16 TFP of the 2007 State Budget of the Republic of Bulgaria Law and Article 124 of CMD 20/02.02.2007, in 2007 the Ministry of Finance made a transfer from the central budget to the Silver Fund representing 25 percent of the proceeds from privatisation of state enterprises for 2006 and 50 percent of the savings of expenditure under the executive budget for year 2006.
Under the provisions of § 17, paragraph 3 of the TFP of the 2008 State Budget of the Republic of Bulgaria Law and item 3 of NA Resolution of 29.11.2007 on approval of additional budget appropriations under the 2007 executive budget, the following components are included in the transfer of the Fund’s resources for 2008:
- 50 per cent of the savings of expenditure under the republican budget for year 2007, determined as the difference between the amounts planned and the amounts reported under the parameters of Article 1, paragraph 2, section II of the 2007 State Budget of the Republic of Bulgaria Law;
- 25 per cent of the receipts from privatisation, as reported in the executive budget for year 2007;
- the excess over the 3 percent of GDP surplus under the consolidated fiscal programme for 2007 reported as at 31.12.2007.
On 22.07.2008, the last amendments of the Privatisation and Post-privatisation Control Law (PPCL) entered into force. 90 percent of the money proceeds from the privatisation of the state-owned participating interest in the capital of any commercial corporations, as well as of self-contained parts of the property of any wholly state-owned commercial corporations and 90 percent of the money proceeds from any damages charged on any obligations assumed but unfulfilled, as included in the contracts for privatisation are transferred to the Fund on an on-going basis.
Pursuant to the provisions of Article 11 of the Law on SFGSSPS, § 17, paragraph 3 of the TFP of the 2009 State Budget of the Republic of Bulgaria Law and Article 44 of Council of Ministers Decree 27/2009 on the implementation of the 2009 State Budget of the Republic of Bulgaria (DCM No 27 of 2009) by 31 May 2009 the following components were transferred to the Fund's account:
- 25 percent of the surplus reported in the 2008 executive budget;
- 90 per cent of the reported in the 2008 republican budget proceeds from privatisation, decreased by the amount of the deductions for the Fund pursuant to Article 8, paragraph 1, item 1 of the PPCL.
- revenues from concessions reported in the executive budget including the revenues reported in central budget for 2008 and under the Ministry of Finance budget from 18 November to 31 December 2008.
In 2009 on an on-going basis receipts from privatisation were deducted in favour of SFGSSPS pursuant to Article 8, paragraph 1, item 1 of PPCL.
In 2010, under Article 11, paragraph 1, item 1 of the Law on SFGSSPS funds representing revenues from concessions reported in the executive budget for 2009 and receipts from privatisation under the amendments to Article 8, paragraph 1 of PPCL (as amended SG No 99/2009).
Pursuant to the provisions of Article 11 of the Law on SFGSSPS for the period from 2011 to 2014 the following components were included in the transfer to the Fund's account:
- privatisation proceeds reported in the executive budget;
- revenues from concessions reported in the executive budget;
- revenues from other sources determined by law or an act of the Council of Ministers – fines and pecuniary penalties and forfeits related to the privatisation process under Article 8(8)(2) of PPCL.
In accordance with the provisions of article 11 of the SFGSSPS Law for the period from 2015 to 2018 from/to the account of the Fund are transferred the following sums:
- privatization proceeds, reported in the state budget for 2014, 2015, 2016 and 2017;
- revenues from concessions, reported in the state budgets for 2014, 2015, 2016 and 2017;
- revenues from other sources, determined by law or act of the Council of Ministers – fines, pecuniary penalties and forfeits related to the privatization process under Article 8(8)(2) and Article 8(9) of the PPCL.
- deductions in accordance with the provisions of Article 129(12) and (15) of the Social Security Code in connection with Article 1(4) and Article 22(2) and (3) of the Law on SFGSSPS.
After the entry into force of the Law on SFGSSPS the Fund is managed by a Management Board consisting of a chairperson and 8 members. The Minister of Finance is the Chairperson, and the Minister of Labour and Social Policy is the Deputy Chairperson of the MB. They participate by title in the Management Board. The members of the MB are appointed and dismissed by a decision of the Council of Ministers. Members must meet the statutory requirements in respect of education and professional experience.
The members of the Fund's Management Board have been appointed by CM Decision No 416 of 2010, as amended by CM Decisions Nos 729 and 843 of 2010, CM Decision No 891 of 2011, CM Decision No 1012 of 2012, CM Decision No 797 of 2013, CM Decision No 821 of 2014, CM Decision No 987 of 2015 and CM Decision Nos 171, 608 and 1043 of 2016, CM Decision Nos 647 and 772 of 2017 and CM Decision No 846 of 2018.
The Long-term investment policy of SFGSSPS and the Mid-term strategy for investment of the funds of the SFGSSPS for the period 2019-2021 have been adopted by the Council of Ministers with CM Decision No 693 of 2018.