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Ekonomia

From the distribution of the bonus, the increase in pensions and the new scheme that is expected to bring drastic changes for the elderly, Arben Malaj gives the important messages, here is the care that the government should have

From the distribution of the bonus, the increase in pensions and the new scheme

Very soon, a new scheme will be applied for pensions, but also for social protection as a whole. Given that the reform made in 2014 has closed its cycle and has not properly addressed the problems, the World Bank and the Albanian government are getting ready to implement a new reform, which aims to be more sustainable and bring higher incomes to retirees. But to talk more about this issue, the problems faced by the elderly and whether this indexation and pension bonus is expected for the elderly and the needy, the "SOT" newspaper spoke with the former Minister of Finance, Arben Malaj. The latter, during an interview for the "SOT" newspaper, emphasizes that the indexation of pensions and the distribution of bonuses for the elderly is a necessity, since as the former minister pointed out, 60-70% of pensioners' income goes to the food basket . According to Mr. Arben Malaj, it is time for the government to turn its attention to the elderly.

-Professor Malaj, very soon a new scheme will be applied for pensions but also for social protection as a whole. Given that the reform made in 2014 has closed its cycle and has not properly addressed the problems, the World Bank and the Albanian government are getting ready to implement a new reform, which aims to be more sustainable and bring higher incomes to retirees. In your opinion, why is Albania changing the pension scheme after 10 years?

The biggest problem that our pension scheme has, the first is the deficit of the measure it produces due to the number of contributors in the first steps of 1 to 4 and 1 to 2 of the clinic carries 1 to 1. The second, the salary increase has created opportunities to receive more income, but the scheme itself will be deficit, but they must reduce the level of its deficit. And in other countries, the schemes are deficit, while in our country, the third private pension scheme is in the first steps.

- In the new scheme, the indexation of pensions is expected to be reviewed, where the inflation of the basket is currently taken into consideration. How likely is this?

I believe that this will be the biggest change, since the most critical situation is among the needy classes, who use 60-70% of their income for basket foods and thus are hit several times more than the average inflation. Given the growth of poverty and inequality, which is the most fragile link and people cannot feel abandoned. Therefore, this element must be included in the pension scheme, which has its own costs, but above all, the biggest cost is that of poverty. As a result, it cannot be ignored and the models of other countries must be followed in order to have a pension that gives pensioners the opportunity for an affordable life.

Also, the focus of the interventions will be the retirement age, referring to the projections made by the 2014 reform, as well as the supplementary pensions will be affected. Can you give us more details about this?

I believe they should be looked at carefully, the age extension element is a critical element and the longevity and age they benefit should be kept in mind. Supplementary pensions will be a specific reform that will require more analysis and arguments.

-Meanwhile, in April 2023, there was an indexation of pensions, but pensioners say that it is not enough and demand another indexation soon. But there is a cacophony as it is rumored that there may be an indexation now, while others say it will be in October. In your opinion, when will the next indexing be and are the indexings that are done effective?

Of course the indexation will take into account the pension group because the shock rate is different. Budgets are medium term and annual budget. And in the annual budget, the Albanian government will have foreseen policies for indexing or increasing pensions. In the first place will be the graduated indexation and in the second place will be the increase in pensions. One thing has been said, that there is no high inflation, the state receives more income in the budget. Establish a new tax where this additional income should have a main goal of compensating the rising costs that pensioners have, starting with those with the lowest income, and then be used for other sources. We also saw last year that we had high inflation, where the government received more income than the plan, while the compensation measure for the needy was incomplete. As a result, the Bank of Albania has often raised the concern that there should be an economic growth that reduces, not increases, that the social protection scheme has been weak and not well addressed.

- Is there a possibility of a bonus for retirees?

The resident system is a system that we put in place in 2004 until now. It is important that employment policies are long-term policies and are not made in the moments of approaching elections, since in those cases and if increases are made, it will not be sustainable and pensioners will face their difficulties again.

Interviewed by: Xhoana Vrani?i