Bulgaria to implement multi-fund pension model amid poverty concerns

Bulgaria is preparing for a transition to a multi-fund pension model. Between September 1 and November 30, 2026, individuals in the second pension pillar will be able to choose between dynamic, balanced, and conservative sub-funds. This new model, set to take effect on January 1, 2027, aims to provide more flexible investment options and potentially higher returns through varied risk/reward profiles.

Despite these structural reforms aimed at future capital accumulation, the financial security of current retirees remains a concern. Economists from the Institute for Market Economics note that for those currently in retirement, the primary issue is whether monthly income is sufficient to cover basic living costs rather than fund returns.

Eurostat data indicates that while poverty risk among Bulgarians aged 65 and older has decreased, a significant gap remains compared to the European Union. In 2025, 24.6% of Bulgarians in this age group were at risk of poverty after social transfers, compared to the EU-27 average of 16.3%. However, the trend is improving; the poverty risk for this demographic in Bulgaria fell from 31.7% in 2015, narrowing the gap with the EU average.