New amendments to the Social Security Code have been adopted by the National Assembly at second reading with the Bill to Amend and Supplement the Social Security Code, submitted by the Council of Ministers on 30 January 2026, concerning the manner in which individuals are insured for pension purposes.

At present, individuals are insured under a three-pillar social insurance system. The first pillar of pension insurance is the State Social Security system, administered by the National Social Security Institute (NSSI). The second pillar is mandatory pension insurance, provided by licensed pension insurance companies through two types of funds – an occupational pension fund and a universal pension fund (for persons born after 31 December 1959). The third pillar includes supplementary voluntary pension insurance funds for individuals who have reached the age of 16, managed by licensed pension insurance.

The amendments, which will enter into force on 1 January 2027, affect the pension system in its Second and Third Pillars. Within these pillars, so-called “sub-funds” will now be established, primarily affecting universal pension insurance.

What are sub-funds?

According to the amendments to the Social Security Code, sub-funds are segregated assets within a universal pension fund and are managed by the company representing it.

The type of sub-fund created is determined based on the maximum allowable proportion of its investments in variable-income financial instruments, as follows:

•           Dynamic sub-fund – up to 90% of the assets in financial instruments under Art. 176, para. 1, items 7, 8, 12–16, and 18 of the Social Security Code.

•           Balanced sub-fund – up to 55% of the assets in financial instruments under Art. 176, para. 1, items 7, 8, 12–15, and 18 of the Social Security Code.

•           Conservative sub-fund – up to 25% of the assets in financial instruments under Art. 176, para. 1, items 7, 12, and 13 of the Social Security Code.

Each sub-fund is formed from the contributions and transferred funds of the insured persons within it and consists of the assets and liabilities undertaken in connection with its activities. Under the newly adopted law, the assets cannot be used to fulfill obligations outside those related to the sub-fund’s activities, providing a certain level of security for individuals.

Monetary funds and other assets can be transferred between sub-funds within a universal pension fund. When entering into a participation agreement with a universal pension fund, the pension insurance company is required, based on data provided by the individual through a questionnaire, to assess the level of investment risk suitable for them and to advise them in choosing a sub-fund with an appropriate investment profile. An individual can transfer to a sub-fund within the same pension insurance company or another. Regardless of whether the sub-fund is new or existing, the company must inform the individual about their rights and obligations by providing a key information document on the sub-fund system. The individual may choose which sub-fund to participate in. If no choice is made, they are allocated automatically according to their age as follows:

•           Dynamic universal sub-fund – until reaching 50 years of age.

•           Balanced universal sub-fund – from 50 years of age to 3 years before the retirement age under Art. 68, para. 1 of the Social Security Code.

•           Conservative universal sub-fund – for individuals with 3 years or less remaining until the retirement age under Art. 68, para. 1 of the Social Security Code.

The creation of sub-funds is also foreseen in the Third Pillar of pension provision. In this pillar, individuals may participate in more than one sub-fund.

Sub-funds are registered in the BULSTAT register.

What are the deadlines for choosing the investment method?

Insured persons in universal pension funds may, in compliance with the limit under Art. 163, para. 4, choose the way their funds are invested. They must submit a written application following the prescribed procedure, specifying the particular sub-fund in which their funds should be managed according to their age, between 1 September and 30 November 2026, after receiving consultation from the pension insurance company. The assessment of compliance with the limit is made based on the individual’s age as of 1 January 2027.

By 31 August 2026, pension insurance companies must adopt the investment policies of the universal pension funds and notify insured persons via a notice on their website and by email.

The pension insurance company managing a universal pension fund will automatically allocate, by 15 December 2026, those individuals who have not chosen a sub-fund, based on their age as of 1 January 2027, in accordance with Art. 137, para. 13.

In compliance with the limit under Art. 163, para. 4, any individual submitting an application to transfer from one universal pension fund to another during the last quarter of 2026 may, at the same time, submit a request to choose a sub-fund in which their funds will be managed, using the form provided by the company managing the fund they wish to join.