New pension reform presented Rama: We will intervene in the scheme, but we will also continue with bonuses
The Albanian government, in cooperation with the World Bank, will intervene again in the pension scheme, more than 10 years after its reform.
The conference organized by the Financial Supervisory Authority brought together representatives of the government, foreign institutions, and experts to reach the appropriate conclusions on how the scheme will proceed.
Prime Minister Edi Rama stated that the bonuses will continue, but a solution will be found to mitigate the gap in the pension amount between those who enjoy it before 2014 and those after 2014.
"One of the points that we need to resolve is how to mitigate the gap between the pensions of those who retired before 2014 and those who retired after 2014. And the difference is that with the new reform we have placed contributions at the center. While previously it was not a contributory system but an assistance system and this has caused the whole big wound which is closing but we still have those who suffer from this wound. We will move in parallel on the one hand with the bonuses which have increased significantly, in terms of quantity and the time of their granting and we have linked these bonuses to economic growth and the performance of the economy. We want these bonuses to continue, while in parallel by re-intervening in the pension system we want to make a re-acceleration without in any way destroying the foundations of the system. And we also still have considerable space in the fight against wage informality".
World Bank representative Xiaoqing Yu stated that some of the mechanisms of the current scheme will be improved and those that will impact future pensions will be improved.
"The pension policies mentioned today will affect future retirees and contributors and employers. This helps you have a long-term vision. We will work to further perfect some of the mechanisms of the pension system, building on the 2014 reform, we are on the right track. Pensions are very important for people's well-being, for budgetary sustainability and we are pleased to have been given the opportunity to support Albania in 2014 and we have learned a lot over this decade about pension policies."
The Minister of Economy, Blendi Gonxhe, emphasized the labor market and the increase in wages by businesses.
"If we do not increase productivity, if we do not reduce informality, if we do not increase high-wage jobs, we will have shortages. Individuals should not choose lower wages, but choose the private sector with higher wages. Business should become aware and offer citizens supplementary pension policies. We are working to implement a series of social housing programs and are looking at reviewing policies with municipalities, not only for buying a first home, but also for expanding apartments."
Although the reform undertaken in 2014 has significantly improved the deficit, it has still not met the expectation of providing sustainability and greater well-being for citizens.
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