With "eyes" only on the state for pensions! - How can we ensure higher income in old age? Private, support for the state
With eyes only on indexation and the end-of-year bonus, but forgetting that there are other ways to benefit from a higher pension in old age. One alternative is a private pension. Despite the fact that the number of Albanians who choose to contribute to such a pension is constantly increasing, the ratio of contributors to the state social security scheme is deep.
According to data from the Financial Supervisory Authority (AMF), the number of members in private pension funds reached over 48 thousand at the end of the first half of the year, increasing by 7.4% compared to the previous year. The private pension scheme saw the addition of 3,315 new contributors.
Despite this, the number of passive members has also increased, that is, those who already have an account in the fund but do not pay contributions.
Citizens have the opportunity to invest their money in eight private pension funds, which are managed by four companies. The money that citizens pay for a private pension, the management companies of private pension funds invest only in government securities, i.e. in treasury bills and bonds, and do not invest it in other forms, such as bank deposits.
Official statistics show that the private pension market has total net assets of around 13.8 billion lek, marking an increase of almost 8%. Around 13.7 billion lek are invested in government securities, including private closed-end funds.
The ratio between those who contribute to the state social security scheme and those who contribute to private pension schemes remains low. So, according to one estimate, approximately 5.7% of contributors to the state social security scheme also pay money into private pensions.
Within the framework of the pension reform on which the Albanian government has been collaborating for some time with the World Bank, with the aim of increasing the benefit amount for those who are newly retiring, it has been discussed to intervene in two main pillars, specifically in the review of the assessment coefficients, as well as in the implementation of the second pillar, which is private pensions, i.e. to make it mandatory that a percentage of an employee's salary also go to a private pension.
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