Open meetings with pensioners across Albania continued today in Fier, featuring an informative discussion on pension issues led by Prime Minister Edi Rama. Pensioners from the city and surrounding areas participated, many of whom have contributed significantly to sectors like oil extraction, processing, and agriculture.
“Our primary focus today is on wages, as the foundation of what affects pensions is contributions—real wages, fully declared wages, and the legal agreements between employees and employers, which should be without any informality,” stated Blendi Gonxhja, Minister of Economy, Culture, and Innovation. He emphasized the importance of careful interventions in the pension system and their long-term impacts, noting, “Our responsibility today is significant; the decisions we make will affect future generations.”
Belinda Balluku, Deputy Prime Minister and Minister of Infrastructure and Energy, highlighted specific developments in Fier, mentioning that “the status of oil workers has been established, which includes 6,000 supplementary pensions. Additionally, we have successfully implemented a retirement age of 60 for this demanding profession, which is five years earlier than the official retirement age.”
****
Prime Minister Edi Rama: Greetings to everyone, and thank you for being here today. We are committed to an open discussion throughout Albania, engaging with political leaders from the Socialist Party, cabinet members, and deputies to connect with as many pensioners as possible. Our goal is to clearly and factually present the current landscape, so we can understand not just what we want to achieve, but how we can do it.**
First and foremost, I want to emphasize that pensions are undoubtedly the most challenging aspect of our development. The issue of pensions is not exclusive to countries like ours; it is a concern for all nations, including the wealthiest, where the challenge of increasing pensions and responding financially to these increases is ongoing. It’s not something that can be addressed today and forgotten tomorrow. Every pension increase must be sustainable over time.
So, why is this the most difficult issue, and what distinguishes pensions from wages? Unlike wages, which are funded directly by the state budget, pensions rely on social security contributions. The pension fund’s sustainability depends on the capacity of social security to meet the demands for pension payments.
Firstly, due to historical factors, we inherited an extremely challenging situation regarding pensions. There has been significant evasion of social security contributions, which complicates the landscape.
Secondly, in the early 1990s, when the country faced economic collapse, many workers were forced into early retirement from factories and enterprises. This led to a sharp, artificial increase in the number of pensioners at a time when the social security fund was incredibly weak.
Thirdly, during this historical period, many people emigrated. Those returning are often surprised by the size of their pension. While they earned income abroad and paid social security there, they did not contribute here. This has created a heavy legacy. When we took office, we found only one pension agreement with another country—Turkey—where the number of emigrants is not particularly significant.
Today, we have successfully established agreements with over 20 countries, with the most significant being with Italy. This allows those who retire and have worked in these countries to benefit from the social security contributions made there. Thus, their pension is effectively the total of contributions made both here and abroad, resulting in a dignified pension for them.
Now, the final and equally challenging aspect is negotiating an agreement with Greece, which we are currently discussing with the Greek side. This will take time—not due to our efforts, but because it is a significant decision with important financial implications.
With Italy, we have finally reached an agreement that recognizes the hard work and contributions of many Albanians who have retired or will retire after working in the Italian economy.
Another crucial point is that, as I mentioned earlier, we continue to face a serious issue with the evasion of social security obligations by both employees and employers. This is the right moment for us to make a strong effort, as our current economic growth and increased opportunities enable us to come together and discuss concrete actions starting from the end of this year. Previously, we did not have this opportunity.
It is absolutely not true that we have neglected or forgotten about pensioners. In fact, the opposite is true.
As we speak, the government and the state budget cover nearly 500 million euros of the gap between social security contributions and pensions. This means that for every pension paid today, part of it comes directly from the government, not from social security. We are ready to not only maintain this support but to increase it. However, the challenge is to keep a healthy balance so that it does not hinder the state’s ability to function effectively and does not obstruct development, which ultimately generates revenue and creates more opportunities.
Taxes are not meant solely for paying pensions. They are necessary for all the essential services the state provides and for financing development.
To put it simply, taxes are primarily for children. Social security is for pensioners, meanwhile with the taxes we fund schools, nurseries, and kindergartens. They also cover healthcare, infrastructure, and a wide range of other services.
Taxes are what pay teachers, doctors, and police officers—all of whom serve the community. In contrast, social insurance is specifically designed to fund pensions. Those who evade these contributions effectively deprive pensioners of their right to a better pension.
We have an aggressive plan to curb the theft of pensions by employers and even by employees who accept cash payments. This practice causes us double harm: first, the employer tells the employee, “Look, I can pay you 400 euros through the bank or 500 euros through the bank because up to 500 euros there’s no profit tax. I’ll give you 500 euros through the bank and another 200 in cash, so you have all of it for yourself without paying taxes for pensions or healthcare.”
These are not just taxes; they are contributions that you make today to ensure a better pension tomorrow. As we speak, there are countless complaints each year at ISKSH because when people retire, they are shocked by the pension they receive. They say, “It can’t be that low; my salary was higher.” In reality, they had a higher salary by including cash payments, but those cash payments do not appear in the state’s records. The state calculates pensions based on registered income, not what was received in cash.
By opting for cash payments, individuals create a trap for themselves when they retire. Furthermore, they harm other pensioners who should have received those funds each month, as the system relies on accurate contributions to function properly.
A 4.1% increase is not a pension raise; it’s an indexation mandated by law. The law requires annual adjustments to account for rising prices, and this calculation is done regularly—neither out of goodwill nor indifference. Depending on various factors, it may result in 4.1%, 3.9%, or 5.2%. The government is obligated to implement this; it’s not a discretionary increase, despite what some might say. We even made two adjustments within a year during the crisis caused by the war in Ukraine when prices surged. What we aim to achieve is something entirely different from this annual adjustment.
So, why is this the right moment? Because the economy has grown, allowing us to explore a new approach to pensions. If the opportunities hadn’t increased to the point where we could start this new strategy, we wouldn’t be having this discussion today. I would simply reiterate what I have said before: we absolutely want to raise pensions, but we are not yet in a position to do so. That is the truth.
Now, we can begin to think differently because the economy is stronger. I also want to address salaries, as there is often concern that when salaries rise, pensioners are negatively affected. In reality, you should be the first to celebrate salary increases because higher salaries mean more contributions toward pensions. Every time someone earns a higher salary, they contribute more to social security. When we raise public sector salaries—like we have done by bringing the average salary for teachers to 950 euros a month—it means that each teacher contributes more to social security. This, in turn, ensures they will receive a better pension upon retirement. Moreover, the increased contributions enhance our social security fund. Therefore, the primary beneficiary of salary increases, aside from the individuals receiving the pay, is indeed the Social Security Fund.
