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Pension industry grows by 34% in the year to June.
submited on 08.09.2006 in category Fiscal affairs | Regulated markets | Macroeconomic developments | Political stability | Fiscal affairs | Monetary policy | Macroeconomic developments
submited on 08.09.2006 in category Fiscal affairs | Regulated markets | Macroeconomic developments | Political stability | Fiscal affairs | Monetary policy | Macroeconomic developments
Pension industry is currently among the most dynamic sectors in the economy despite heavy regulation and slow reform of the pay-as-you go system. By mid-2006 private funds manage some 640 mln euro, or 34% more than a year before.
Employers reacted positively to the pension-tax cuts in 2006. Registered employment grows at a steady rate while salaries show a record growth of over 12%. Revenues of the social security funds remained unchanged and the assets of private universal pension funds grew by some 100 mln euro in the year to June.
It seems that on the other hand employees are starting to realize the importance of self-insurance or saving for old age. The voluntary pension funds’ assets grew by 22% annually and reached 230 mln euro in June. One has to keep in mind that they are only one of options for pension savings.
The importance of pension industry will keep rising in Bulgaria. We have estimated that private pension funds now manage between 6 and 7 percent of the households’ financial wealth, while that share is some 14% on average in EU-15. Meanwhile, savings in housing is about 65 times bigger than savings in pension funds now. This will gradually change though as housing will be view as one of the options (not the main one) for old-age saving.
Employers reacted positively to the pension-tax cuts in 2006. Registered employment grows at a steady rate while salaries show a record growth of over 12%. Revenues of the social security funds remained unchanged and the assets of private universal pension funds grew by some 100 mln euro in the year to June.
It seems that on the other hand employees are starting to realize the importance of self-insurance or saving for old age. The voluntary pension funds’ assets grew by 22% annually and reached 230 mln euro in June. One has to keep in mind that they are only one of options for pension savings.
The importance of pension industry will keep rising in Bulgaria. We have estimated that private pension funds now manage between 6 and 7 percent of the households’ financial wealth, while that share is some 14% on average in EU-15. Meanwhile, savings in housing is about 65 times bigger than savings in pension funds now. This will gradually change though as housing will be view as one of the options (not the main one) for old-age saving.
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