Each citizen of a European Union (EU) member state who has worked on the territory of more than one member states and has insurance period in the respective countries has a right to European pension. This is a pension with amount based on the pension contributions in each member state and on the accomplished work period. The European pension consists of the sums which each country shall pay to the worker regarding their insurance period on the respective territory.
Receiving a European pension and its calculation
One shall apply for a pension in the country of their permanent residence. The document which is to be submitted in Bulgaria is Pension Application Form. In it one is to declare their insurance period acquired in another state. After submitting the documents in the country of permanent residence the respective authorities are responsible for processing them and for the collection of information on pension contributions in other countries.
Regarding the right to pension, one of the most important things is whether the person fulfills the requirements for pension entitlement in each of the countries where they have worked. These are typically requirements related to the needed insurance period and minimum retirement age, which vary in different states. If in one of the countries one does not have the needed insurance period, the respective authorities are to consider the period from the other state where they have worked. Both countries make official enquiries for the paid contributions and for the insurance period of the person in the respective territory. The result is European amount of pension, and each pension authority shall calculate the part of the pension which is to be paid by it regarding the work periods in each EU member state.
There are three types of calculations, which are to be made:
- Theoretical amount – the amount of pension if the whole work period of the person was in the respective state
- Independent benefit (national pension) – the amount of the pension for the exact work period in the respective state
- Pro-rata benefit – this is the part which the state must pay for the work period of the person on its territory based on the theoretical amount, the exact work period and the whole work period
When the work period is insufficient according to the national legislation, the national pension is not to be calculated, but the theoretical amount and the pro-rata benefit are calculated. When there is sufficient insurance period, there will be a calculation of national pension, theoretical amount and pro-rata benefit. If there is a difference between the national pension and the pro-rata benefit, one has a right to receive the bigger amount. The total amount, which one is to receive, is equal to the sum of the amounts from the two member states.
A worked 37 years in Bulgaria and 2 years in Slovakia. Slovakia calculates theoretical amount – as if A worked there 39 years and is to receive 1200 euros for example. Then there is a calculation of pro-rata benefit for the exact work period in Slovakia – 1200.2/39 = 61,54 euros. Bulgaria calculates national pension for 37 years of work experience on its territory – 700 BGN for example. Then there is a calculation of the theoretical amount – 39 years, 750 BGN for example. In the end there is a calculation of pro-rata benefit – 750.37/39 = 711,54 BGN. The person has a right to receive the bigger amount from Bulgaria – 711,54 BGN. The European amount is the sum of the amounts of the two states and each state is to pay the respective part of the whole amount.
People who worked under employment contract in several EU member states are entitled to a respective part of their pension in each country where they worked. They are to declare this fact (the existence of insurance period acquired in a foreign country) when they submit a Pension Application Form in Bulgaria (or in the respective country of permanent residence). The pension authorities in both countries are to make the relevant calculations ex officio.