Instruction No. 1 of 21.02.2006 on the Procedure and Method for Official Allocation of Persons Who Have Not Chosen a Fund for Additional Voluntary Pension Insurance

INSTRUCTION No. 1 of 21.02.2006 on the Procedure and Method for Official Allocation of Persons Who Have Not Chosen a Fund for Additional Voluntary Pension Insurance

Issued by the Chairman of the Commission for Financial Supervision and the Chairman of the Management Board of the National Revenue Agency, published in State Gazette (DG), No. 22 of 14.03.2006, amended and supplemented, No. 46 of 19.06.2009.

Section I General Provisions

Art. 1. This Instruction determines the procedure and method for the official allocation of persons who have not chosen a universal or professional pension fund.

Art. 2. Persons for whom the obligation to insure in a universal or professional pension fund has arisen shall be officially allocated in cases where they have not submitted an individual application for participation in the manner and within the deadlines provided for in Art. 137, para. 3 and Art. 140, para. 3 of the Social Insurance Code, including when they have submitted an application for participation in more than one universal, respectively professional pension fund, or when the submitted application is irregular.

Section II Procedure for Carrying Out Official Allocation

Art. 3. (1) The official allocation of persons under Art. 2 shall be carried out by a commission established at the National Revenue Agency (NRA), which consists of one authorized representative each from the NRA, the Commission for Financial Supervision, and the Bulgarian Association of Companies for Additional Pension Insurance. The representative of the NRA shall be the Chairman of the commission.

(2) (Amend. - DG, No. 46 of 2009) The official allocation shall be carried out four times a year - within 10 working days after the first working day of February, May, August, and November.

(3) The results of the official allocation shall be documented in protocols, to which the lists of officially allocated persons in the respective pension funds on electronic media shall be attached. The protocols for official allocation and the lists on electronic media shall be stored at the NRA.

(4) The official allocation shall be considered valid if the protocol under para. 3 is signed by at least two of the members of the commission.

Art. 4. All persons for whom the conditions under Art. 2 exist as of the day preceding the conduct of the allocation shall be subject to official allocation.

Art. 5. (1) No later than the end of the working day preceding the date of official allocation under Art. 3, para. 2, the NRA shall form one aggregate of persons subject to official allocation in universal pension funds, and one aggregate of persons subject to official allocation in professional pension funds.

(2) The aggregates under para. 1 shall be prepared after:

1. comparison of the data from the NRA register of insured persons in universal pension funds with the data submitted in accordance with Art. 5, para. 4 of the Social Insurance Code;
2. comparison of the data from the NRA register of insured persons in professional pension funds with the data submitted in accordance with Art. 5, para. 4 of the Social Insurance Code, for persons working under the conditions of the first and second category of labor.

(3) Deceased persons for whom the NRA has information shall be excluded from the aggregates under para. 1.

(4) Persons who have exercised their right to a pension for insurance seniority and age shall be excluded from the aggregate of persons subject to official allocation in a professional pension fund.

Section III Method for Carrying Out Official Allocation

Art. 6. (1) Persons under Art. 2 shall be officially allocated to the funds for additional voluntary pension insurance based on the following criteria:

1. achieved annual yield of the respective pension fund, reported as of the end of the quarter preceding the official allocation, based on the previous 24-month period;
2. amount of fees accrued by the pension insurance companies under Art. 201, para. 1, item 1 of the Social Insurance Code for the quarter preceding the official allocation;
3. number of accepted individual applications for participation in a universal or professional pension fund for the quarter preceding the official allocation.

(2) The data under para. 1, items 1 and 2 shall be provided to the NRA by the Commission for Financial Supervision. A reference on the number of accepted individual applications under para. 1, item 3 shall be prepared by the NRA.

(3) For universal or professional pension funds for which a 24-month period has not elapsed from the transfer of the first insurance contribution to their account, the achieved annual yield shall be considered the average weighted yield determined in accordance with Art. 2, para. 2 of Ordinance No. 12 of 2003 on the method and procedure for determining the minimum yield in the management of assets of funds for additional voluntary pension insurance, for covering the difference to the minimum yield and for forming and using the reserves for guaranteeing the minimum yield (DG, No. 110 of 2003).

Art. 7. (1) The number of persons subject to official allocation in universal or professional pension funds shall be divided by criteria depending on the weight of each criterion.

(2) The weights of the criteria are as follows:

1. for the criterion under Art. 6, para. 1, item 1 - 34 percent;
2. for the criterion under Art. 6, para. 1, item 2 - 33 percent;
3. for the criterion under Art. 6, para. 1, item 3 - 33 percent.

Art. 8. (1) The total number of persons subject to official allocation for each universal or professional pension fund shall be determined as the sum of the numbers under the respective criteria.

(2) The number of officially allocated persons for each universal or professional pension fund under the separate criteria shall be determined as follows:

1. (Amend. - DG, No. 46 of 2009) directly proportional to the difference between the annual yield achieved by the fund, reported as of the end of the quarter preceding the official allocation based on the previous 24-month period, and the declared minimum yield, reported as of the end for the same quarter, according to the formulas specified in Appendix No. 1;
2. inversely proportional to the amount of the fee accrued by the pension insurance company under Art. 201, para. 1, item 1 of the Social Insurance Code for the quarter preceding the official allocation, and according to the formulas specified in Appendix No. 2;
3. directly proportional to the number of accepted individual applications for participation in the fund for the quarter preceding the official allocation, and according to the formulas specified in Appendix No. 3.

(3) (New - DG, No. 46 of 2009) Universal and professional pension funds, in the management of which, as of the end of the quarter preceding the official allocation, a yield equal to or below the minimum was achieved, shall participate in the official allocation with a coefficient of zero for the criterion under Art. 6, para. 1, item 1.

Art. 9. (1) On the principle of random selection from the aggregates under Art. 5, para. 1, the number of persons equal to the whole part of the total number under Art. 8, para. 1 for each fund shall be allocated to each of the registered universal and professional pension funds.

(2) After the allocation under para. 1, the remaining unallocated persons shall be allocated by the commission on the principle of random selection to a fund.

Art. 10. Within 7 days from the date of official allocation under Art. 3, para. 2, the NRA shall provide to each pension insurance company lists on electronic media with the officially allocated persons in the funds for additional voluntary pension insurance managed by it.

ADDITIONAL PROVISIONS

§ 1. For the purposes of this Instruction, "irregular application" means an application that does not meet the requirements established in the Social Insurance Code and the subordinate acts for its implementation.

§ 2. "Quarter" means any period from January 1 to March 31 - first quarter, from April 1 to June 30 - second quarter, from July 1 to September 30 - third quarter, and from October 1 to December 31 - fourth quarter, of each calendar year.

TRANSITIONAL AND FINAL PROVISIONS

§ 3. The first official allocation for 2006 shall be carried out within one month from the entry into force of this Instruction.

§ 4. This Instruction is issued on the basis of Art. 137, para. 4 and Art. 140, para. 4 of the Social Insurance Code in conjunction with Art. 13, para. 1, item 3 of the Law on the Commission for Financial Supervision and Art. 3, para. 1, item 10 of the Law on the National Revenue Agency and is adopted by the Commission for Financial Supervision with a decision under protocol No. 5 of 25.I.2006 and by the Management Board of the National Revenue Agency with decision No. RMF-9 of 21.II.2006.

———————————————————————————————— TRANSITIONAL AND FINAL PROVISIONS to the Instruction for Amendment and Supplement of Instruction No. 1 of 2006 on the Procedure and Method for Official Allocation of Persons Who Have Not Chosen a Fund for Additional Voluntary Pension Insurance (DG, No. 46 of 2009)

§ 4. The second official allocation for 2009 under the procedure of Art. 3, para. 2 shall be carried out within 10 working days from the entry into force of this Instruction.

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Appendix No. 1 to Art. 8, para. 2, item 1 (Amend. - DG, No. 46 of 2009) Determination of the number of officially allocated persons in accordance with the yield criterion

Sd = 0.34.S, (1) where: Sd is the number of persons subject to official allocation by the yield criterion in universal, respectively professional pension funds; S - the number of persons subject to official allocation in universal, respectively professional pension funds; dmin - the minimum yield for the previous 24-month period on an annual basis for universal, respectively professional pension funds, determined in accordance with Ordinance No. 12 of 2003 on the method and procedure for determining the minimum yield in the management of assets of funds for additional voluntary pension insurance, for covering the difference to the minimum yield and for forming and using the reserves for guaranteeing the minimum yield; n - the number of universal, respectively professional pension funds, for which di > dmin;

Appendix No. 2 to Art. 8, para. 2, item 2 Determination of the number of officially allocated persons in accordance with the criterion of the amount of accrued fees

where: St1 is the number of persons subject to official allocation by the criterion of the fee amount per contribution; S - the number of persons subject to official allocation in universal, respectively professional pension funds;

where: Kit1 is the fee coefficient per contribution of fund i; Tit1 - the coefficient of accrued fees per contribution in fund i for a quarterly period; Tmint1 - the minimum size of the coefficients of accrued fees per contribution for a quarterly period for a universal, respectively professional pension fund; n - the number of universal, respectively professional pension funds; the coefficients are obtained by dividing the sum of accrued fees per contribution by the sum of all contributions transferred to fund I for the quarterly period;

where: Sit1 is the number of persons subject to official allocation by the criterion of the fee amount per contribution in fund i; Kit1 - the fee coefficient per contribution of fund i.

Appendix No. 3 to Art. 8, para. 2, item 3 Determination of the number of officially allocated persons in accordance with the criterion of the number of accepted individual applications for participation in the fund

where: Sz is the number of persons subject to official allocation by the criterion of accepted individual applications for participation in a universal, respectively professional pension fund; S - the number of persons subject to official allocation in a universal, respectively professional pension fund;

where: Kiz is the coefficient of accepted individual applications for participation in the i-th fund (universal or professional pension fund); Zi - the number of accepted individual applications for participation in fund i for the quarter; n - the number of universal, respectively professional pension funds;

where: Siz is the number of persons subject to official allocation by the criterion of accepted individual applications for participation in fund i; Kiz - the coefficient of accepted individual applications for participation in the i-th fund (universal or professional pension fund).