ORGANIZATION AND OPERATIONS OF PRIVATE PENSION INSTITUTIONS IN ALBANIA
Keywords:
Private pension institutions, pension reforms, investment incentives, labor market, demographic factorsAbstract
Abstract
Pension reforms, despite the changes that have between them, stretching and realized through the contributors and beneficiaries, and
therefore any parametric structural reform implemented in order to maintain the balance of public pension scheme. In its entirety, the
social security system is characterized by significant changes both from the institutional perspective and from that of the methods of its
organization.The reform of public pension schemes and their support in private schemes is an ongoing problem for all countries of the
world. This reform takes a special importance to the fact that existing schemes have caused a great waste of public budget and a
reduction of national savings being made in this way an obstacle to growth. In Albania in addition of the public pension’s system, operate
the private pension’s institutes, licensed by the state. According to the statistics show that up to December 2010, these institutes operate
private pensions: Raiffeisen Pensions, Capital and Sigma IPP, with a total of 4992 contributors involved in this scheme. The operation of
private institutions of pension is necessary, to supplement and complete social security scheme and are necessary to ensure a higher
level of living of individuals. They create convenience for individuals to receive additional income in the future. The level of their income
after retirement will consist of the income they provide as a result of involvement in the scheme of compulsory insurance plus benefits
received from participation in private pension funds. These funds provide opportunities for raising the national savings rate, serving as an
important resource for stimulating new investment, as well as affecting the removal of distortions in the labor market, contributing to
reducing the informal market. Even demographic factors, identify the need for private insurance. So the combination and harmonization of these insurance schemes encourage economic progress.
