Universal private pension funds in Bulgaria registered the highest weighted average annual yield of 12.88 per cent for the period September 2005 – September 2007, the Financial Supervision Commission (FSC) was quoted as saying on October 10 by Sega daily.

Three months earlier, the yield was a little more than nine per cent, Sega said. The market was estimated to have around three million clients, according to FSC data.

Private pension insurance in universal pension funds is mandatory for all employed Bulgarians born after 1959.

Private pension companies in Bulgaria operate three types of pension funds: voluntary, occupational (professional) and universal. The contributions paid to them by employees and employers however, are just a small portion compared to what Bulgarians pay to the National Social Security Institute, the only state-owned pension fund.

There was no fund with yield of less than 10 per cent at end-September, Sega said. CCB – Sila, operated by Central Co-operative Bank (CCB), owned by the holding structure Chimiport, was the record holder with 18.3 per cent yield. The other two pension companies of Chimiport, Suglasie and LUKoil, marked an increase of more than 15 per cent in the yields on their assets.

There was a record growth in the voluntary pension funds’ average net return on investment, with CCB – Sila moving up by almost 23 per cent, followed closely by its main competitor, Budeshte with 21.1 per cent. The voluntary pension funds have around 550 000 clients, and their overall average annual yield at the end of September 2007 was 14.3 per cent.

The average annual yield of occupational pension funds, which collect pension contributions from about 200 000 people who work in hazardous labour conditions, was 13.75 per cent for the period.

The main driving force behind the yield growth of pension funds had been the legal amendment made in March 2006, which allowed these companies to invest in company stock, FSC deputy chairman Bisser Petkov was quoted as saying by Dnevnik daily newspaper on October 10. Private pension funds already invested about one third of their assets in company securities, he said.