The number of people receiving old-age pensions in Albania reached 491,504 in the first half of 2023, nearly 23,000 more than the same period a year ago.
Since the end of the year, the scheme has been expanded by around 10,000 new pensioners.
These were the highest growth rates in the past two decades. The number of old-age pensions expanded by around 5% in a year, but on the other hand, the pension scheme shows stability.
Increased contributions and lower amounts of new pensions have improved the scheme's deficit.
Official data shows that in the first half of the year, the pension scheme's deficit, which was subsidized by the state budget, was 8 billion leks, compared to 12 billion in the first half of 2022, marking a nearly 30% decrease.
Income from social insurance saw a 12% year-on-year increase in the first half.
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| Pensioners at Post Office No. 13 in Tirana waiting to receive their pensions |
During this period, the "baby boom" generation (born in the 1960s and 1970s) is entering retirement. Most of them worked during the transition years and do not meet the conditions for a full pension.
People who retire after 2015 will experience a more moderate increase in pension amounts over the medium term compared to pensioners who retired before this year, due to the change in the principle, from a solidarity pension to a contribution-based pension.
Albania suffers from a high level of informal employment, which means that those paying insurance are fewer than those reported as employed.
Until 1991, the number of employees in former state enterprises and former agricultural cooperatives, who were also contributors to the social insurance system, was 1,446,000.
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| Graph showing the number of pensioners from 2021 to 2023, source: Social Security Institute, reported by Monitor |
The first beneficiaries of the system began receiving pensions in 1960.
According to statistics of the time, in 1966, there were about 35,000 beneficiaries, mostly with partial pensions, against 263,000 contributors. By the end of 1991, the number of beneficiaries had reached 329,000, reflecting a dependency rate of 4.5 contributors per 1 beneficiary, compared to 7.4 contributors per beneficiary in 1966.
In 2022, there were 1.1 contributors per beneficiary.
Demographic transition is rapidly changing the population structure in favor of older age groups.