The draft law aims to spur the development of the private pension fund through the increase of participation in the scheme; the provision of an additional pension, which complements the basic pension provided through the public pension scheme; well-informed decisions of individuals regarding the accumulation of their retirement savings; new opportunities for employers regarding the creation of private schemes for their employees; increasing the quality of the output and customer service through the good administration of private pension funds by the administrative companies; the promotion of competition in the best interest of the fund members.

The current law does not create competitive elements related to the negotiation of management fees or investment policies. This problem is addressed in the proposed draft law through the creation of the fund with closed participation, where employers can negotiate some of the elements of the contract with the management companies (management fee, investment policy, etc.). In this way, employers are more inclined to create private schemes for their employees, leading to increased participation in private pension funds.

The Democratic Party MP, Jorida Tabaku, during the discussion, brought up the concern about the ratio of expenses to income in social security scheme.

“According to the data and referring to the last report of the SSA, the number of beneficiaries has increased by 15,000 every year which is headed for equalizing the beneficiaries and contributors. First, high immigration; secondly, the informality and the failed scheme in 2014 which was a reform far from what was expected to happen in the country, far from the normal average pension in the village and further that in the city. Also, the total pension is lower than the average salary, as is the calculation according to the INSTAT formula. While currently it is as much as 40% of the salary as an average pension. How will the fund make up for the decline in the number of contributors in the future given the situation we are coping with?”, she said.

The draft law will continue to be examined article by article in the Commission.
/r.e/sm/