BULGARIA TO ALLOW SILVER FUND TO INVEST IN EQUITY AND BONDS

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 March 28 2011.

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 1.7 billion leva, a scanty 57.2 million leva of which was collected in 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 Dnevnik source, the move had been considered for a long time and was expected to give an impetus to the country's subdued stock market.