Private pensions increase by 60%

TIRANA, Dec. 4 – Although in its initial stages, the private pension fund, with currently only three market operators, continued growing. Data published by the Albanian Financial Supervisory Authority show the private pension market rose by 60 percent to 248 million lek at the end of the third quarter of 2012, up from 154 million lek at the end of 2011.The number of contributors in the three currently operating companies, Sigal Life Pension, Raiffeisen Pensions, and Sicred Pensions rose to 7,065 up from 6,295 at the end of 2011. The Supervisory Authority says the three market operators posted a total net profit of 7.5 million lek at the end of the third quarter of 2012.
The non-banking financial sector, composed of financial institutions supervised by the central bank and the Financial Supervisory Authority, represented 4.7 percent of the GDP at the end of 2011 compared to 4.9 percent in December 2010. The sector is dominated by non-banking financial institutions whose assets account for 2.9 percent of the total, followed by insurance companies at 1.5 percent, credit-saving unions at 0.8 percent and the private pension funds at their initial stages representing only 0.01 percent of the GDP.
In its latest report the European Commission concludes that there remains insufficient administrative capacity in the non-banking financial sector to enforce market surveillance and proper implementation of legislation. In 2011, The Albanian Financial Supervisory Authority licensed the third operator in the field of voluntary pension funds. By the end of 2011, the number of voluntary pension contributors had increased by 26% as compared with 2010 and increased by 2.9% in the first quarter of 2012. Nevertheless, the private pension market remains small in terms of both number of contributors and amount of contributions.