The State Fund for Guaranteeing the Stability of the State Pension System (SFGSSPS) has been established with the Transitional and Final Provisions of the 2006 State Budget of the Republic of Bulgaria Act. In 2008 the National Assembly adopted a State Fund for Guaranteeing the Stability of the State Pension System Act, whose implementation was assigned to the Minister of Finance.
The objective of the Fund is to support and guarantee the sustainability of the state pension system through allocation of targeted, additional or extraordinary revenues from the state budget for a period not less than 10 years. These revenues are invested in various classes of assets in order to provide additional funds for the Pensions Fund. The Fund’s resources are an independently separated part of the central budget.
The Ministry of Finance publishes, on a monthly basis, data on the changes in the cash flows under the Fund's account with BNB on its website minfin.bg, SFGSSPSA Silver Fund banner, Statistical data, Reporting data on the Silver Fund.
In execution of § 16 of the Transitional and Final Provisions of the 2007 State Budget of the Republic of Bulgaria Act and Article 124 of Council of Ministers Decree 20/2007 the Ministry of Finance made a transfer from the central budget in favour of the Silver Fund to the amount of 25 percent of the proceeds from privatisation for year 2006 and 50 percent of the savings of expenditure under the executive budget for year 2006.
Pursuant to the provisions of § 17, paragraph 3 of the Transitional and Final Provisions of the 2008 State Budget of the Republic of Bulgaria Act and item 3 of National Assembly Resolution of 29.11.2007 on approval of additional budget appropriations under the 2007 executive budget the transfer of funds for the Fund included:
- 50 percent of the savings of expenditure under the executive budget for year 2007, determined as the difference between the amounts planned and the amounts reported for the indicators according to Article 1, paragraph 2, section II of the 2007 State Budget of the Republic of Bulgaria Act;
- 25 percent of the proceeds from privatisation, as reported in the executive budget for year 2007;
- the excess over the 3 percent of GDP surplus for 2007 under the consolidated fiscal programme, reported as at 31.12.2007.
The last amendments to the Privatisation and Post-privatisation Control Act (PPCA) entered into force on 22.07.2008. 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 the obligations assumed but unfulfilled, as included in the contracts for privatisation, are transferred to the Fund on an ongoing basis.
In accordance with the provisions of Article 11 of the State Fund for Guaranteeing the Stability of the State Pension System Act (SFGSSPSA), § 17, paragraph 3 of the Transitional and Final Provisions of the 2009 State Budget of the Republic of Bulgaria Act and Article 44 of Council of Ministers' Decree No 27 of 2009 on the Execution of the 2009 State Budget of the Republic of Bulgaria (CMD No 27 of 2009), by 31 May 2009 amounts, covering the following components, were transferred to the account of the Fund:
- 25 percent of the surplus reported in the executive budget for year 2008;
- 90 percent of the proceeds from privatisation as reported in the executive budget for year 2008, reduced by the amounts transferred to the Fund, in accordance with Article 8, paragraph 1, item 1 of the Privatisation and Post-privatisation Control Act (PPCA);
- the proceeds from concessions as reported in the executive budget, including the proceeds reported in the central budget for 2008 and in the budget of the Ministry of Finance for the period 18 November - 31 December 2008.
In 2009, proceeds from privatization under the procedure of Article 8, paragraph 1, item 1 of PPCA were transferred to SFGSSPSA on an ongoing basis.
In 2010, in accordance with Article 11, paragraph 1, item 3 of the State Fund for Guaranteeing the Stability of the State Pension System Act the transferred amounts represented proceeds from concessions as reported in the executive budget for 2009 and proceeds from privatization in accordance with the amended Article 8, paragraph 1 of PPCA (SG 99/2009).
The State Fund for Guaranteeing the Stability of the State Pension System Act provides that the Fund should be managed by a Management Board consisting of a chairman and 8 members. The Minister of Finance is chairman and the Minister of Labour and Social Policy is Vice Chairman of the Management Board. Their participation is regulated by law. The members are appointed and dismissed by a decision of the Council of Ministers /CM/. The members should have the educational qualification and professional experience specified in the Act. The CM also determines the expenses on remunerations of the Management Board.
Decision № 416/ 2010 of the Council of Ministers, amended by Decision № 729/ 2010 of the Council of Ministers, appointed the members of the Management Board of the Fund.
On 07.10.2010 the Management Board of the Fund held its first meeting under the chairmanship of Deputy Prime Minister and Minister of Finance Simeon Djankov. The participants in the meeting discussed the future directions in the work of the Management Board, the draft Rules of Procedure, the current status of the Silver Fund, and initial views on its strategic management.