The universal pension funds in our country, in which everyone born after 1959 is mandatorily insured, have reported an extremely modest geometric mean yield of only 2-3% for the last five years. According to official data from the Financial Supervision Commission (FSC) for the period 2021-2025, the results have been seriously compromised by the economic turmoil in 2022, when some funds recorded losses of up to minus 13%, according to dunavmost.com.
Statistics show that at the end of last year, the total amount of net assets of all funds exceeded the impressive 31.17 billion leva. Although in some years the yield jumps above 9%, the average picture for the five-year period looks alarming against the background of macroeconomic realities. The highest geometric mean yield for the period is UPF "CCB-Sila" with 4.13%, followed by "Toplina" with 3.38%. The largest fund by market share – "Doverie" reports 2.38%, and at the bottom of the table remains "DSK-Rodina" with 1.63%.
The dry figures of the supervision acquire a completely different dimension when compared with the data of the National Statistical Institute. The accumulated inflation for the same five-year period gravitates around 35%. This means that the real purchasing power of money in individual accounts has decreased dramatically, since the official yield is almost ten times lower than the depreciation of money.
Deductions also put an additional burden on savings. The results indicated by pension companies are gross, and currently the fee from each insurance contribution amounts to 3.75%. The average amount in accounts in universal funds currently reaches about 5,650 leva per person. According to the law, companies are obliged to guarantee that upon retirement the person will receive at least the nominal gross amount of the deposited money, regardless of stock market crashes.
Various better results are reported by voluntary pension funds (third pillar), where the investment restrictions are not so conservative. In them, for 2025 alone, the nominal yield of five of the companies exceeds 8%, and the geometric mean yield for the five-year period is at levels of around and above 6%. These indicators clearly demonstrate what the effect would be if the funds were managed more risky, but with the potential for higher returns.
It is precisely this investment contrast that underlies the changes to the Social Security Code recently adopted by the National Assembly. With them, the state finally gave the green light to the so-called multi-fund model, which will actually work from the beginning of 2027.
Instead of all money being managed in the same conservative way, savings will be divided into three sub-funds - dynamic, balanced and conservative. People under the age of 50 will be able to direct their funds to the dynamic portfolio, where investments in shares will carry a higher risk, but also a chance to overcome inflation. For insured people who have less than 3 years left until retirement, the money will be transferred to the conservative fund to ensure full protection of the capital before its payment. Experts expect that with this system, the income replacement rate will jump from the current 12.5% to 21.4%.