Bulgaria to allow Silver Fund to invest in equity and bonds
The finance ministry gave no specific reason for the proposed changes
Bulgaria has decided to entitle the Silver Fund, a structure set up as a reserve fund for the public pillar of the pension insurance system to compensate for the extra costs of aging, to invest in equity and bonds of local companies, deputy finance minister Boryana Pencheva said on Monday. The proposed legislative changes will be drafted by a working group, she said.
The financial scheme, set up in 2008, was intended to accumulate concession and sell-off proceeds, to be managed actively to ensure state pensions payouts after 10 to 15 years. The fund has so far amassed resources of BGN 1.7 billion, a scanty BGN 57.2 million of which was collected for the full 2010.
The entire resource is deposited with the Bulgarian National bank (BNB), although the Silver Fund is allowed by law to invest in obligations of companies in the European Union and in third countries. For two years, however, its management board has failed to pick a contractor to channel the money into such instruments.
The finance ministry gave no specific reason for the proposed changes, but according to a source of Dnevnik, the move had been considered for a long time and was expected to give an impetus to the country's subdued stock market.