Citizens' interest in private pensions increases - AFSA: Over 6 thousand more members than in 2023. 16.8% increase in assets
The number of people choosing to invest in private pension schemes has increased significantly from year to year and, as a result, the value of the net assets of pension funds has also increased.
According to data from the Financial Supervisory Authority, in the first quarter of this year the number of members in private pension funds was 44,926, a figure that has increased by 15.7% compared to the previous year. Half of the members are female and half are male. If we do a comparative analysis, 6,098 new contributors have been added to the private pension scheme, calculated as of 2023.
Official statistics show that the private pension market has total net assets of around 12 billion lek, marking an increase of 16.8%. These assets are invested 100% in treasury bills and bonds of the Albanian government.
The number of private pension funds in Albania has also grown at the same pace. During 2024, seven pension funds administered by four companies operated in the private pension fund market. With the increasing demand from people to join private pension schemes, it is normal that there will also be an increase in this type of pension funds.
The increase in living costs and the low value of the current pension amount are considered insufficient to cover the needs of retirees, while investing money saved over the years in a private pension fund allows for an additional pension payment along with the interest earned over the years of contribution to the fund.
For some time now, the Albanian government has been collaborating with the World Bank on a new pension reform, with the aim of improving the scheme, but at the same time increasing the amount of benefits for pensioners.
One of the proposals to increase the benefit amount for those who are newly retiring is 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 towards a private pension.
The number of individuals contributing to a private pension is about 5.81% of the total number of contributors to the social security scheme.
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