TIRANA, Dec. 4- Pensions in Albania have increased by five percent in the last two years, however this can also be considered indexing because of rising inflation. Using inflation politically, the government has paid pensioners in the city every six months. The transition period from communism has created this problem. International institutions such as the World Bank have declared that the pension scheme has nearly failed and have called upon the government to implement concrete changes to correct it.
World Bank
The WB said that though Albania has managed, so far, to avoid any major disruption in the pension scheme, it has to undertake serious reforms if it is intent on making pensions survive. The long term success of the pension program is dependent on the reforms and in the clear declaration of revenues. Many people declare their incomes to be very low and pay their contributions accordingly and this is harming the pension fund. The scheme is, in general distorted, especially due to differences in urban and rural areas.
The government’s initiatives to raise pensions for the poorest category of people, those pensioners in villages, have adversely burdened employees in urban areas whose contributions go towards that aim.
This mixed record when those who pay get a little in return and those who actually don’t pay get the same pension, which despite being little is more than they are entitled to, is not sustainable in the long run. According to the actual pensions scheme, urban salaries at the minimum level that pays contributions for pensions is 14.000 lek while the same pension for rural areas is 13.140 lek.
