Ministry of Finance

of the Republic of Bulgaria

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 Act. At the end of 2008 the National Assembly (NA) adopted an Act on SFGSSPS and its implementation was assigned to the Minister of Finance.

The Fund's objective is to support and guarantee the sustainability of the state pension system. This is achieved through allocation of certain additional or extraordinary revenues from the state budget for a period longer than 10 years. These funds are to be invested in order to ensure additional resources for the Pension Fund. The resources of the Fund are an independently separated part of the Central budget and respectively part of  the Fiscal reserve. The proceeds in the Fund are regulated with the Transitional and Final Provisions (TFP) of the State Budget Act for every year, Decrees of the Council of Ministers (DCM), resolutions of the NA and the Act on SFGSSPS (Article 11).

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.

In pursuance of § 16 TFP of the 2007 State Budget of the Republic of Bulgaria Act and Article 124 of DCM 20/02.02.2007 the Ministry of Finance made a transfer from the central budget to the Silver Fund  representing 25 per cent of the proceeds from privatisation of state enterprises for 2006 and 50 per cent of the savings of expenditure under the republican budget for year 2006.

Under the provisions of § 17, paragraph 3 of the TFP of the 2008 State Budget of the Republic of Bulgaria Act and item 3 of NA Resolution of 29.11.2007 on the approval of additional budget appropriations under the 2007 republican budget the following components are included in the transfer of the Fund's resources:

  • 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 Act;
  • 25 per cent of the receipts from privatisation, as reported in the republican budget for year 2007;
  • the excess over the 3 per cent 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 Act (PPCA) entered into force. In the Fund's account on an on-going basis are to be transferred sums in the amount of 90 per cent of the proceeds from privatization of the state-owned parts of the capital in private corporations, as well as 90 per cent of the proceeds from self-contained pieces of property of sole proprietor companies with state participation in the capital and 90 per cent of the proceeds from forfeits on assumed but unfulfilled obligations as included in the privatization contracts.

Pursuant to the provisions of Article 11 of the Act on SFGSSPS, § 17, paragraph 3 of the TFP of the 2009 State Budget of the Republic of Bulgaria Act 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 per cent of the surplus reported in the 2008 republican 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 republican 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 Act on SFGSSPS and § 73 of  the TFP of the 2010 State Budget of the Republic of Bulgaria Act funds representing revenues from concessions reported in the republican budget for 2009 and receipts from privatisation under the amendments to Article 8, paragraph 1 of PPCL (as amended SG No 99/2009) were transferred.

 Pursuant to the provisions of Article 11 of the Act on SFGSSPS for the period form 2011 to 2014 the following components were included in the transfer to the Fund's account:

  • privatisation proceeds reported in the republican budget;
  • revenues from concessions reported in the republican 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, paragraph 8 (2) of PPCL.

In accordance with the provisions of article 11 of the SFGSSPS Act in 2015 on the account of the Fund are transferred the following sums:

  • privatization proceeds, reported in the state budget for 2014;
  • revenues from concessions, reported in the state budget for 2014;
  • 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, 1 paragraph 4 of the Act on SFGSSPS.
  • deductions, in accordance with the provisions of Article 129, paragraph 12 of the Social Security Code and Article 1, paragraph 4 of the Act on SFGSSPS.

Entering into force of the Act on SFGSSPS provides that the Fund is to be managed by a Management Board (MB) comprising 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 to education and professional experience.

 The members of the Fund's MB 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 Descision No 821 of 2014, CM Decision No 987 of 2015 and CM Decision No 171 of 2016.

A long-term investment policy of SFGSSPS and a mid-term strategy for investment of the funds of the SFGSSPS for the period 2016-2018 have been adopted by the Council of ministers with CM Decision No 737 of 2015.