The contribution period of the new pensions is decreasing from year to year, moving further and further away from the condition to benefit from a full pension.
According to official data from the Social Security Institute, people who retired last year had an average of 26.8 years of work with insurance out of the 38 years needed to receive a full pension. In 2014, when the pension reform began to be implemented, the average contributory years were 33.4 and in 2010 they were 39.
This trend is showing that the vast majority of new retirees, who enter the pension scheme, do not meet the criteria that the law has for the benefit of a full pension. This phenomenon causes the retirees of this generation to be paid less than those who retired 10 years ago.
Last year 50% of the total old-age pensions were partial, an indicator that is increasing year after year.
Experts in social insurance claim that the generation that worked for 30 years in transition and did not pay insurance is now retiring.
The rate of insurance coverage in the working age population is very low in Albania. For example, in 2023, according to the Institute of Statistics 1.86 million people were aged 15-64. Of them, only about 44% were contributors to the pension scheme and about 56% of the aged population were neither contributors nor pensioners.
Among the self-employed, a small number contribute to the rural scheme, while other self-employed contribute to the main scheme and account for only 10% of the total contributors, while self-employment accounts for nearly 30% of total employment in the country. The low rate of coverage of contributors raises the risk of strong growth of partial pensions in the future.
On the one hand, young retirees have fewer and fewer years of contributions and on the other hand, year after year, together with the retirement age, the period of years with contributions also increases. Last year it took 38 years of insurance to get a full pension and by 2032 it will take 40 years to get a full pension.
But with the current rates, Albanian pensioners will not complete even half of the years with contributions, making their payments in the future to be very low, almost like the minimum pension.
Pensioners, who do not fulfill their working years and do not manage to benefit from a full old-age pension, are increasing rapidly. The faster growth of partial pension beneficiaries shows that the third age risks extreme poverty, as inflation has been high in the last two years.