Bulgarian pension system in the light of the demographic and economic changes in the country
University of National and World Economy, Sofia, Bulgaria
Data publikacji: 29-07-2020
Organizacja i Zarządzanie 2019;80:207–218
The Bulgarian pension system is a classical three pillar structure. The first pillar functions on a pay-as-you-go principle and is a mandatory one, the second and third pillars are fully funded. The insurance into the second column is mandatory and that into the third one is voluntary. The demographic trends in the country are unfavorable and they put an increasing pressure on the pay-as-you-go part of the system. At the same time the economic growth realized in the last years made possible the financing of the deficit formed in the state pension system with comparative ease. The current research is trying to put some light on these tendencies and their influence on the government decisions regarding pension reforms and the development of the funded components of the pension system. The paper is structured in two parts. The first one gives information on the demographic and economic changes in Bulgaria in the last 20 years and the effects of these variables on the pay-as-you go pillar of the system and the second part concerns the reforms needed for strengthening the funded components of the system. Further reforms are needed only if the second and third pillar of the pension system are seen as complementary elements of the state pension system in the long term.