Abstract: Age is one of the qualifying conditions which entitle insured persons to receive cash benefits from insurances for old age. Nevertheless, at this stage, the practice of linking the amount of pensions to the age at which they are awarded is rather limited in pensions insurance practice. The objective of this research is to study the significance of age to the pension insurance systems of EU states and hence propose a mechanism which makes it possible to link the amount of pensions for insurance periods and age in Bulgaria to the average life expectancy after retirement.
Abstract: Three financial coverage systems are known and applied in the theory and practice of pension insurance: cost coverage, capital coverage and premium coverage. These systems show how operating pension costs will be allocated over time as well as among those insured. The common thing between them is that they are based on a large aggregate insurance and on the principle of mutual assistance and solidarity between the participants. In the cost coverage system and the capital coverage system solidarity encompasses all age generations while in the premium coverage system the principle of mutual assistance is spread over a particular age generation.
Some of the regulations in the Social Security Code make it impossible to apply the financial systems already mentioned in supplementary pension insurance. This strongly impedes actuary calculations and the effective allocation of the accrued pension funds.
The results obtained from the numerical example calculated in this article clearly show that it is necessary to reconsider certain passages in the Social Security Code and consequently to proceed from an individual to a collective allocation of supplementary pension insurance funds.