Bulgaria serves as a contrast to Romania’s pension reform debate, where current savings withdrawal rules are insufficient for a true second pillar pension.
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Bulgaria has unexpectedly become a good example in the current debate regarding Romania’s second pillar of the pension system, as a new law attempts to remove Romanians’ right to withdraw 100% of their second pension savings immediately after retirement. In Bulgaria, this is not possible (unless the accumulated amount in the individual account is too low). However, even this existing prohibition does not make the second “pension” a true pension for most people because at the time of accumulation, individuals’ contributions to the second pillar are so low that they only cover deferred payments for a few years.
