Instruction No. 1 of 21.02.2006 for the procedure and manner of official distribution of persons who have not chosen a fund for supplementary compulsory pension insurance (in force until 31.12.2026)

INSTRUCTION No. 1 of 21.02.2006 on the procedure and manner for official distribution of persons who have not chosen a fund for supplementary compulsory pension insurance Promulgated - SG, issue 22 of 14.03.2006; amended and supplemented, issue 46 of 19.06.2009; repealed, issue 74 of 18.08.2026, effective from 01.01.2027. Issued by the Chairman of the Financial Supervision Commission and the National Revenue Agency

Section I General Provisions

Art. 1. This instruction defines the procedure and manner for the official distribution of persons who have not chosen a universal or professional pension fund.

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

Section II Procedure for Official Distribution

Art. 3. (Amended - SG, issue 46 of 2009)(1) The official distribution of persons under Art. 2 is carried out by a commission established at the National Revenue Agency (NRA), which consists of one authorized representative each from the NRA, the Financial Supervision Commission, and the Bulgarian Association of Supplementary Pension Insurance Companies. The chairman of the commission is the representative of the NRA.

(2) (Amended - SG, issue 46 of 2009) The official distribution is 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 distribution are formalized with protocols, to which lists of the officially distributed persons in the respective pension funds on electronic media are attached. The protocols for official distribution and the lists on electronic media are stored in the NRA.

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

Art. 4. All persons for whom the conditions under Art. 2 are met as of the day preceding its conduct are subject to official distribution.

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

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

1. comparing 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 Security Code;
2. comparing 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 Security Code, for persons working under conditions of first and second category of labor.

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

(4) Persons who have exercised their right to a pension for insurance length of service and age are excluded from the aggregate of persons subject to official distribution in a professional pension fund.

Section III Manner of Official Distribution

Art. 6. (1) Persons under Art. 2 are officially distributed among the funds for supplementary compulsory pension insurance based on the following criteria:

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

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

(3) For universal or professional pension funds for which a 24-month period has not expired since the transfer of the first insurance contribution to their account, the achieved annual yield is taken to be the weighted average yield, determined in accordance with Art. 2, para. 2 of Ordinance No. 12 of 2003 on the manner and procedure for determining the minimum yield in the management of assets of funds for supplementary compulsory pension insurance, for covering the difference up to the minimum yield and for forming and using reserves to guarantee the minimum yield (SG, issue 110 of 2003).

Art. 7. (1) The number of persons subject to official distribution in universal or professional pension funds is 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. (Amended - SG, issue 46 of 2009)(1) The total number of persons subject to official distribution for each universal or professional pension fund is determined as the sum of the numbers according to the respective criteria.

(2) The number of officially distributed persons for each universal or professional pension fund according to the individual criteria is determined as follows:

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

(3)(New - SG, issue 46 of 2009) Universal and professional pension funds, in whose management a yield equal to or below the minimum has been achieved by the end of the quarter preceding the official distribution, participate in the official distribution with a coefficient of zero for the criterion under Art. 6, para. 1, item 1.

Art. 9. (1) Based on the principle of random selection from the aggregates under Art. 5, para. 1, a number of persons equal to the integer part of the total number under Art. 8, para. 1 for each fund are distributed to each of the registered universal and professional pension funds.

(2) After the distribution under para. 1, the remaining undistributed persons are distributed by the commission based on the principle of random fund selection.

Art. 10. Within 7 days from the date of the official distribution under Art. 3, para. 2, the NRA provides each pension insurance company with lists on electronic media of the officially distributed persons in the supplementary compulsory pension insurance funds managed by it.

ADDITIONAL PROVISIONS

§ 1. For the purposes of this instruction, "irregular application" is an application that does not meet the requirements established in the Social Security Code and the subordinate legislation for its application.

§ 2. "Quarter" is every 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 distribution for 2006 shall be carried out within one month of the entry into force of this instruction.

§ 4. The instruction is issued on the basis of Art. 137, para. 4 and Art. 140, para. 4 of the Social Security Code in connection with Art. 13, para. 1, item 3 of the Law on the Financial Supervision Commission and Art. 3, para. 1, item 10 of the Law on the National Revenue Agency and was adopted by the Financial Supervision Commission with decision by 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.

Annex No. 1 to Art. 8, para. 2, item 1

Determination of the number of officially distributed persons according to the yield criterion (Amended entirely - SG, issue 46 of 2009)

Sd = 0.34 * S, (1) where: Sd is the number of persons subject to official distribution according to the yield criterion in universal, respectively professional pension funds; S - the number of persons subject to official distribution in universal, respectively professional pension funds;

Kid = (di - dmin) / Σ(dj - dmin) for j=1 to n, where dj > dmin where: Kid is the yield coefficient of the i-th fund (universal or professional pension fund); di - achieved annual yield of the i-th fund, reported at the end of the quarter preceding the official distribution, based on the previous 24-month period, where di > dmin; dmin - the minimum yield for the previous 24-month period on an annual basis for universal, respectively professional pension funds, determined according to the procedure of Ordinance No. 12 of 2003 on the manner and procedure for determining the minimum yield in the management of assets of funds for supplementary compulsory pension insurance, for covering the difference up to the minimum yield and for forming and using reserves to guarantee the minimum yield; n - the number of universal, respectively professional pension funds for which di > dmin;

Sid = Sd * Kid where: Sid is the number of persons subject to official distribution according to the yield criterion in fund i; Kid - yield coefficient of the i-th fund (universal or professional pension fund).

Annex No. 2 to Art. 8, para. 2, item 2

Determination of the number of officially distributed persons according to the criterion of the amount of fees charged

St1 = 0.33 * S, (1) where: St1 is the number of persons subject to official distribution according to the criterion of the amount of the fee from each contribution; S - the number of persons subject to official distribution in universal, respectively professional pension funds;

Kit1 = (Tmint1 / Tit1) / Σ(Tmint1 / Tjt1) for j=1 to n where: Kit1 is the coefficient of the fee from each contribution of fund i; Tit1 - the coefficient of fees charged from each contribution in fund i for a quarterly period; Tmint1 - the minimum amount of the coefficients of fees charged from each contribution for a quarterly period for a universal, respectively professional pension fund; n - the number of universal, respectively professional pension funds; the coefficients Tit1 are obtained by dividing the sum of the fees charged from each contribution by the sum of all transferred contributions to fund i for the quarterly period;

Sit1 = St1 * Kit1, (3) where: Sit1 is the number of persons subject to official distribution according to the criterion of the amount of the fee from each contribution in fund i; Kit1 - the coefficient of the fee from each contribution of fund i.

Annex No. 3 to Art. 8, para. 2, item 3

Determination of the number of officially distributed persons according to the criterion of the number of accepted individual applications for participation in a fund

Sz = 0.33 * S, (1) where: Sz is the number of persons subject to official distribution according to the criterion of accepted individual applications for participation in a universal, respectively professional pension fund; S - the number of persons subject to official distribution in a universal, respectively professional pension fund;

Kiz = Ziz / ΣZjz for j=1 to n where: Kiz is the coefficient of accepted individual applications for participation in the i-th fund (universal or professional pension fund); Ziz - the number of accepted individual applications for participation in fund i for a quarter; n - the number of universal, respectively professional pension funds;

Siz = Sz * Kiz, (3) where: Siz is the number of persons subject to official distribution according to 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).