Glossary
Student Loan
A targeted loan intended to cover tuition fees and/or living expenses for students and doctoral candidates. Repayment usually begins after graduation. Some student loans are guaranteed by the state through financial support.
Subject of Insurance
The specific object or risk against which protection is provided against financial losses in the event of a particular insured event related to a person, property, activity, or liability, and for which the insurer provides coverage under the insurance contract. For example, the subject of insurance may include property, liability, life, health, or the bodily integrity of the insured.
Sum Insured
The maximum amount of compensation the insurer may pay for a specified risk under the policy.
Supplementary Compulsory Pension Insurance (SMPI)
This is the second pillar of the pension system in Bulgaria, implemented by licensed pension insurance companies through the funds they manage, where compulsory contributions are accumulated in individual accounts. It entitles those born after December 31, 1959, to a second pension through participation in a universal pension fund (UPF) and early retirement pension for workers in first and second category jobs through participation in a professional pension fund (PPF). Insured persons choose from the registered pension funds, and if they do not specify a fund, they are allocated by default. They can transfer their individual account from one fund to another, as well as to the Pensions Fund of the State Social Insurance.
Supplementary Pension Insurance
Part of the three-pillar pension system in Bulgaria. It is implemented through compulsory and voluntary insurance funds managed by licensed pension insurance companies. It includes Supplementary Compulsory Pension Insurance (SMPI) in universal and professional pension funds for persons born after 1959 and for workers for employees working under the conditions of the first and second occupational hazard categories (2nd pillar), as well as Supplementary Voluntary Pension Insurance (SVPI) for all persons who wish to accumulate supplementary pension (3rd pillar). It operates on a capital principle, where insurance contributions accumulate in individual accounts, invested, and used to pay supplementary pensions upon upon the retirement, disability, or death of the insured person.
Supplementary Remuneration
Monetary payments in addition to the basic salary, paid to an employee depending on additional working conditions, achieved results, or the specific nature of the work performed. They are regulated by the Labour Code and the Ordinance on the Structure and Organisation of Salaries. Supplementary remuneration may be: compulsory, as provided for in legislation (for night and overtime work, work under hazardous conditions, work on weekends and public holidays, temporary substitution of an absent employee); and at the employer’s discretion, provided for in internal rules or a collective labour agreement (for achieved results or high-quality work, bonuses and incentives, length of service and professional experience, social benefits). Supplementary remuneration is reflected in the employment contract or internal rules and is subject to taxation and social insurance contributions as employment income.
Supplementary Voluntary Pension Insurance (SVPI)
This represents the third pillar of the pension system in Bulgaria. SVPI provides an opportunity to accumulate additional pension funds through voluntary contributions to private supplementary voluntary pension funds (SVPF) and supplementary voluntary pension funds under occupational schemes (SVPF-OS). Any person aged 16 or older may contribute individually or be covered by an employer or another insurer for supplementary pension insurance after concluding a contract with a pension insurance company. Contributions are credited to individual accounts, with the insured persons determining the amount and frequency themselves – monthly, for another period, or as a lump sum. The supplementary voluntary pension is received independently of the pension granted by the state social insurance system, and the insured person may choose between a lifelong or fixed-term old-age pension, as well as between deferred or lump-sum payment of the accumulated funds.
Surety/Guarantor
A third party involved in a contract with a credit institution, who guarantees with all their assets the repayment of the debt if the borrower fails to fulfil their obligations.
Survivor's Pension
A social payment granted under the Social Security Code, regardless of inheritance rights, and linked to the deceased’s entitlement to a personal pension for length of service and old age or disability. To receive a survivor’s pension, an application must be submitted to the National Social Security Institute, and the amount is determined according to the number of eligible heirs. The payment is a monthly sum provided to certain close relatives of the deceased insured person: children up to 18 years of age, or up to 26 if they are studying, including in case of disability; surviving spouse – the pension starts 5 years before the standard old-age retirement age or earlier if the spouse is unable to work; parents – if they have reached retirement age and do not receive their own personal pension (with exceptions, e.g., parents of a military service member who died in service).
Systematic Investing
A popular passive investment strategy based on the principle of dollar-cost averaging (DCA). It involves investing the same amount at regular intervals in selected assets.
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