According to the Social Insurance Code (SIC), you are entitled to a pension for contributory service and age in the year when you meet both conditions – you reach the required age and have the required service for the same year. You can find out about them on the National Insurance Institute (NII) website.

 

•         Steps for granting a pension

In order to be granted a pension for contributory service and old age, you must submit a sample application to the relevant territorial division of NII at your permanent or current address, along with the necessary documents – for example, employment records, service records, insurance records, as well as a certificate of your personal payment account issued by your bank or other payment service provider, if you do not want your pension to be paid from the post office at your address. Data after 1996, which employers, social insurers and self-insured persons are required to submit periodically to the National Revenue Agency, may also be used to prove contributory service and insurance income.

Keep in mind that the pension is granted from the date you acquire the right, if the application with the necessary documents is submitted within 2 months of this date. In case the deadline is missed, the pension is granted from the date of submission of the application for granting the pension.

Persons who have acquired the right to a pension for contributory service and age in the Republic of Bulgaria or the right to an old-age pension in another country, as well as those who receive a pension for contributory service and age under Art. 68a of the SIC (early retirement) or a fixed-term occupational pension under Art. 168 of the SIC (from an occupational pension fund), are not entitled to unemployment benefit.

In order for the procedure for granting your pension to proceed quickly and smoothly, it is a good idea to start obtaining the necessary documents for insurance service and income in advance - this may take you longer than you think. Review your personal documentation related to employment relationships and, if you find any gaps or omissions, contact the employer for the relevant period. They are obliged to issue you free of charge documents certifying your contributory service and/or insurance income and/or work category for the periods before January 1, 2000.

To establish contributory service and insurance income from 1997 onwards, the data available in the NII information system can also be used. Through it, you can check whether the data submitted for you by your employers are complete and accurate. If a correction is necessary, contact the relevant employer and request that it be made. To access the information in the NII information system, you need a Personal Identification Code (PIC), which can be issued to you by any territorial division of the NII. Through the Unified Portal for Electronic Services of the NII, you can access information and services with a PIK issued by the NII or NRA, or with a qualified electronic signature.

For pensions not related to work activity, specific documents are required to prove the conditions for granting such a pension. Such are, for example, military or civil disability pensions; social old-age pension for persons over 70 years of age or social disability pension for persons over 16 years of age.

 

•         Calculating the amount of the pension

What pension you will receive depends mainly on the amount of income from which pension contributions were deducted and the duration of the insurance period. Of course, the amount will be within the legally defined framework for maximum and minimum pension amounts. They change over the years, and up-to-date information can be found on the NII website.

Pensions are calculated according to a formula that has four components – 1) the years and months of contributory service; 2) a certain percentage for each year of contributory service (and the corresponding proportional part of this percentage for the months of contributory service), which is determined in the SIC; 3) an individual coefficient calculated based on the person’s insurance income for the periods after 31.12.1999 until the date of granting the pension in a manner regulated in the SIC; and 4) the average monthly insurance income for the country for 12 calendar months prior to the month of granting the pension. In order to determine the income from which the pension is calculated, the average monthly contributory income for the country determined in this way is multiplied by the person’s individual coefficient. From 1 July 2022, an amount of BGN 60 is added to the amount of each new pension.

When calculating the pension, the insured person's participation in a Universal pension fund (UPF) is also taken into account, as his individual coefficient is reduced in accordance with the rules established by law. Insured persons receive a pension in reduced amount from the State social security and a pension under the UPF, the type of which depends on the amount of funds accumulated in their personal account (more information can be found here). Persons who have changed their pension insurance and have transferred the funds from their UPF account to the Pension fund of the State Social Security before the date of the issuance of the order for granting the pension, according to the procedure specified in the SIC, receive a pension from the State Social Insurance in full, without reduction.

 

•         Pension payments

There are two main options for receiving a pension. One way is to do this through a branch of "Bulgarian Posts" EAD at the permanent or current address of the pensioner, which you must indicate when submitting the application for granting a pension, and can update it if necessary. The other, more and more widely used option is to have the pension transferred to your personal payment account, opened in a bank or other payment service provider. A list of financial institutions with which the NII works in this regard can be found here.

 

•         Tax benefits

According to the Income Taxes on Natural Persons Act in Bulgaria, pensions from mandatory and voluntary insurance in Bulgaria and abroad are non-taxable and accordingly you are not obliged to declare them. This means that if you receive only a pension as income, you do not owe tax on it.

 

•         Compensation from the employer upon termination of the employment relationship with the acquisition of pension rights for insurance period and age

This legal option will certainly help you financially in the initial retirement period. You should know that the compensation can only be received in connection with retirement and only once. According to the current legislation, if you have acquired the right to a pension for contribution service and age, upon termination of the employment relationship, regardless of the reason for this, you are entitled to compensation in the amount of your two-month gross salary. The amount of the compensation increases significantly if in the last 20 years you have accumulated at least 10 years of work experience with the same employer or in the same group of companies. In this case, its amount is your six-month gross salary.

 

Useful links:

National Social Security Institute

National Revenue Agency

Social Security Code

Personal Income Tax Act

Labor Code