Guide
UPF or NOI: understanding the second pillar
People born after 1959 receive a pension from two sources — NOI and a universal pension fund. How does the second pillar work, how does it affect the state pension, and what choice do you have?
How the universal pension fund works
Everyone born after 31 December 1959 and insured under state social insurance mandatorily contributes 5% of insurable income to a universal pension fund (UPF) of their choice. The money accumulates in a personal account and is invested by a licensed pension company supervised by the Financial Supervision Commission.
Unlike the pay-as-you-go first pillar, UPF money is your personal property — if you die before retirement it is inherited by your heirs.
How the UPF affects your state pension
Because 5% of your contribution goes to the fund instead of NOI, the state pension of UPF members is reduced proportionally — the individual coefficient is adjusted with a reducing multiplier for the periods insured in the second pillar.
The idea is that the two pensions together exceed what you would receive from NOI alone — but the outcome depends on fund returns, fees and your insurance history.
The choice: UPF or NOI only
You have the right to transfer your UPF funds to the state "Pensions" fund (the Silver Fund) and receive a full state pension — and back. The choice can be changed, but no later than a set period before reaching retirement age, so check the current deadlines with the National Revenue Agency.
Rule of thumb: the higher your account balance relative to the "loss" from the reduced state pension, the more favourable the UPF. Compare both scenarios with our calculators before deciding.
Fees and returns
Funds charge a fee on each contribution and an annual investment fee — both capped by law. Returns are published by the FSC every 3 months; compare them over long periods (5–10 years), not a single year.
You can switch funds once a year free of charge if you are unhappy with performance — the account transfers in full.
What happens at retirement
At the Art. 68 retirement age you have three options depending on your balance: a lifetime supplementary pension, scheduled withdrawals, or a lump sum (for small amounts). The lifetime pension can include a guaranteed period or transfer to heirs.
UPF payments start regardless of whether you already receive a state pension — the two are granted under separate procedures: the state one by NOI, the second by the pension company.
The second-pillar calculator projects your account’s future value and your monthly UPF pension.
Go to calculator