Increase in Pensions: Informative Public Discussions with Pensioners Begin

Public discussions with pensioners started today in the capital and will continue in cities across the country. Prime Minister Rama is leading these discussions to inform retirees about the government's commitment to pension issues and to seek a prompt and stable solution.

"We will engage in open discussions with retirees regarding pensions to address both an obligation and a legitimate demand, especially now that our economy is becoming more inclusive due to ongoing reforms and sustainable growth. Pensioners should not be excluded from the opportunities this economic growth provides, especially when others are earning significantly higher salaries than when we began this effort," stated Prime Minister Rama at the meeting, attended by Minister of Finance Petrit Malaj, Minister of Economy, Culture, and Innovation Blendi Gonxhja, and Deputy Minister Olta Manjani.

During the meeting, the current situation was outlined along with future plans. Minister Malaj emphasized the urgency of finding both short-term and long-term solutions for pensions. "In the short term, we are considering a substantial increase in the year-end bonus, depending on economic performance and our country's financial capabilities. This bonus is intended to alleviate your daily financial burdens and assist those in greater need. In the long term, we aim to establish a stable pension scheme that guarantees continuous increases in pensions."

Minister Gonxhja highlighted efforts to improve the pension system: "We are dedicated to making essential improvements to the pension scheme, including ensuring equality for pensions in the same professions, raising the lowest pensions to at least the vital minimum, and increasing the average pension."

Deputy Minister Manjani provided additional details on the pension scheme, underscoring the government's commitment to enhancing support for retirees.

Prime Minister Edi Rama:

Hello and thank you all for being here today! We are opening a public discussion with retirees regarding pensions. This is an important obligation and a legitimate demand at this stage, especially as our economy begins to transform into a more inclusive one due to ongoing reforms and sustainable growth. Pensioners should not be excluded from the expanding opportunities that our economy has created, particularly when others are earning significantly higher salaries than they did when we initiated this effort.

I am here today alongside my colleagues from the pension management team, and I will first pass the floor to the Minister of Finance. He will provide an overview of the current situation and convey accurate information about pension financing to as many pensioners as possible, including the media. It's important to understand that pensions represent a significant challenge not only for the Albanian government but for every government worldwide.

I want to summarize this initial moment and our first contact. We plan to engage broadly with pensioners throughout Albania to explain and discuss these matters. It is crucial for everyone to be clear about the efforts we must undertake. This will require significant work and concrete plans, not just for the distant future but starting immediately. We want to ensure that pensioners can benefit from the new economic landscape piece by piece.

Firstly, I want to express my deep regret that, when pensions were indexed at 4.1%, you were inundated with misleading narratives from those who feign concern for you. You have lived long enough to recognize who truly cares and who simply offers crocodile tears. You are aware of what was done-or not done-for you when they had the opportunity. It's essential to be wary of those who present themselves as new faces but are, in fact, continuations of the past. If it weren't so, there wouldn't be such attempts to manipulate the feelings of pensioners with some tales that lack substance or reality.

Nonetheless, you know very well that pension indexing is a legal annual practice. The 4.1% had nothing to do with what I have personally committed to in front of you and what we are committed to doing, to begin including pensioners in the growing economy. It was merely a legal indexing based on price increases, and that indexing does not depend at all on our wishes-whether we want it to be 4% or 7%. We have no right to interfere and change it. It's arithmetic, and it continues normally. However, keep one thing in mind: that 4.1%, which at first glance may seem insignificant, translates directly to 100 million euros. That's 100 million euros added immediately to the overall pension fund. As the Deputy Minister explained, the general pension fund currently lacks about 500 million euros to allow us to have higher pensions than we currently do. And these 500 million euros is taken out of the budget every year by the government, meaning it is sourced from taxes and passed on to pensioners, as it should be. This will immediately be increased by another 100 million next year from that 4.1%. The figures are staggering when viewed in the context of the state budget and the increasing number of pensioners.

Some people simply say, "Well, lower the salaries of the deputies, lower the salaries of these people, lower the salaries of those people, and give that money to the pensioners." You know what we're talking about. This might seem reasonable, especially with the atmosphere created where you, as loyal followers of politics, understand better than anyone else that your days are filled with taking care of grandchildren, daughters-in-law, sons-in-law, husbands, and all kinds of relatives. But at the end of the day, you need those who appear on television and turn your day into night.

It's completely absurd. There's no connection at all. Those who receive higher salaries contribute more to pensions every month. They contribute to the pension system, and naturally, pensions should be covered by those contributions. Meanwhile, taxes are paid for investments and other state expenses; they are not paid for pensions.

First, this government implemented a pension reform in 2014, which means that if you look at the pensions of those who retired after 2014, based on contributions, you will see that many of you who retired before 2014 have lower pensions for the same years of work. Why? Because the reform came nearly a quarter-century late.

The second thing this government, led by the Socialist Party, has done is to state clearly from the outset of that reform, "We cannot leave any elderly person of retirement age without a pension," even if they are not listed in any social insurance registry, primarily encompassing grandmothers who were homemakers. Very few countries in Europe have this approach. Even in the developed European countries, there are elderly individuals who do not receive pensions at all because they lack contributions and depend on their children. They have no pension. Naturally, the social pension we have established is small, there's no discussion about that, but our scheme ensures universal coverage-meaning we do not leave anyone uncovered.

Next, keep in mind that all of these amounts are substantial. The same goes for healthcare, but I don't want to dwell on that here. Health insurance, along with avoiding health insurance costs, amounts to around 500 million euros, so we are talking about approximately 1 billion euros in total each year that the state budget allocates for pensions and healthcare to cover the large gap from previous years without reforms-years when everything was taken and destroyed, when all systems were set ablaze, and people were able to retire after just 40 years without having made contributions, making it impossible to cover them. In the past, people left and now return here as pensioners from Greece after working there for 30 years, only to say, "Well, this is all I get for my pension." I'm sorry, but you weren't here; you were there.

That's why we found Albania with an agreement. For 23 years, there had been an agreement concerning the pensions of all Albanians who went abroad. If those agreements, which we have made in the last 10 years, had been made earlier, we would not be in this situation. Because that pensioner from Greece will definitely come here and will receive contributions he paid there and vice versa, which we achieved with Italy, one of the two most difficult agreements.

So, this is all a process imposed by objective factors. It's not a matter of whether we want it or not; there isn't a prime minister in the world who wouldn't want to increase pensions, and no prime minister in the world who isn't tempted by the idea: "Let's raise pensions because they represent votes." However, to do this without careful consideration is akin to digging another hole for Albania, one even worse than the pyramid schemes. All those you hear speaking, of all ages-whether they are the ones you know well or those who are still in their formative years-are products of the pyramid politics; they only know how to create pyramids.

Moreover, let me put it this way, for e.g a couple of pensioners. The state purchases 175 kWh of energy for everyone. This does not count as part of pensions, but rather as support. Many positive developments have taken place during this period, which is why we are here today to have this conversation with you. I have always said that pensions are the last stone in the wall for Albania 2030, but I also said a while ago that we will need time.

Now we are at a moment when we have started to see possibilities, and we will begin to share these opportunities with you. However, we must be very aware of what we are all doing together. We need great solidarity in this effort, not to divide what we have in the budget, but to ensure that thousands, tens of thousands of normal people-people who comply with the law and are well-dressed-are not stealing your pensions every month as if it were normal. You hire a worker and tell him, "Brother, your salary is 600, 700, or 800 euros, but I will give you 400 in the bank, and the rest in cash because it's better that way." Then this person retires and sees his pension and says, "What is this pension?" He starts complaining and saying: "You calculated my pension incorrectly."

But the situation is as it is because the ledger shows what was passed through the bank, and from that, the pension fund calculates his pension. The cash payments do not count toward the pension, which is where the real theft happens. This is the great deception with which employers and employees are currently handling this issue, and we will intervene strongly here. I do not wish to issue threats or warnings, but I will tell all businessmen, especially those in construction: there is no such thing today as a construction worker earning 400 euros a month, 500 euros a month, 600 euros a month, or 700 euros a month. It does not exist!

And they register all of you there with minimum wage. This is a crime! Until today, we have treated this as informal employment, and one of the good things that has happened is that since 2013, we have increased the number of contributors by 290,000. That's not insignificant, but it's still insufficient and unjustifiable that they declare unreal wages. Those unreal wages are a crime. A crime against every pensioner.

Not only must they be fought against, but they also need to become aware that they are entering a very grave wrongdoing. They are entering a very serious sin. Continuing with the few working years, this is a huge problem! I explained earlier where this comes from. Meanwhile, with the increasing number of pensioners every year-estimating 15,000 to 18,000-we predict that the fund needs to be around 2 billion euros. If you look at the pension fund in Albania compared to all others, it is the largest fund in the state budget, making up 1/4 of the state budget. One-fourth of the state budget means whatever the state collects, one-fourth goes to pensioners. Fortunately, we now see this positively, as we are starting to create some space to directly contribute to having a more reasonable bonus. But on the other hand, we absolutely need contributions from those who should be paying so that you can receive more.

At the end, I want to add that you need to be very certain about this, and this is not just rhetoric. There has never been, nor will there ever be, another political force or government that can do the maximum for you. Even though the maximum may not be the desired maximum, it is still the maximum. Anything else is an illusion and a form of self-deception. Be assured that the issue of pensions is a nail in my head and a nail on the government's table since day one when I sat there.

The reasons why this takes time, we tried to explain in a few words today and will elaborate further, but we will share with you why we are opening this conversation today. At the end of the discussion, we cannot just say that we explained everything to you, and now at the end of the year, we will give you that 5,000 ALL bonus, and you will just wait. No, starting from the end of the year, we will prepare for these words to take meaning. When we talk about Albania 2030, whether people want it or not-and unfortunately, those who don't want it are more than they should be-we will take it to the European Union. We will take it to the European Union, but we cannot take it there and continue with the same old discussions.

So, over these years, we will make a significant turn in the issue of pensions by mobilizing society, whether willingly or not, with the force of law, ensuring that anyone who earns money here in the Republic of Albania does not dare to touch the portion that belongs to pensioners.

You often hear people asking, "Why aren't pensions being increased?" But what are they doing themselves? They are lying and stealing-it's a harsh word, but it's theft. They take contributions meant for pensions and for their children and pocket them. The question arises: with all the businesses in the Republic of Albania that have flourished and the significant turnover in our economy, how can pensioners survive on these pensions and with these high prices? You know well how you hardly manage. You survive because a portion of that turnover comes from your children.

However, children should primarily pay their social security contributions. This way, the Social Security Fund takes care of everyone. Not only does it care for everyone, but taxes also go toward further investments, which create more economic opportunities and higher wages. You need to understand this: the more expensive you become, the closer I get to sitting in that chair. You should know that every wage increase should make you happy. When you see that wages have risen and that the average salary in the administration has reached 900 euros, you should rejoice. Why? Because higher wages mean increased contributions to social security. Those earning 900 or 950 euros, especially teachers, are your most reliable contributors because they receive their paychecks through the state, which withholds taxes.

Unlike builders or other businessmen who might say, "Here, take this cash without taxes," that's not how it works. You're not giving them money tax-free; you're robbing them of their right to enjoy retirement and the sunset of their lives without the fear of making ends meet. When judgment day comes, you will be the ones to hold everyone accountable. What's needed now is for all pensioners to ask every employed person they know-friends, neighbors, relatives-whether they pay their social security contributions. Anyone who crosses your path, ask them, "How much do you contribute to social security, my business-owning friend? I'm curious!"

We need to unite on this front. I hope all businesses join us in this effort. We are the only country in the region with zero tax for small businesses-zero! No other place offers this. Zero VAT for up to 100,000 euros in turnover. What do we ask of small businesses? Pay your social and health insurance contributions. Can we really tolerate them not paying these contributions? Can we accept that when we've removed all other burdens and committed to no taxes until 2029? And what about the additional threshold up to 140,000 euros in turnover, with no taxes, no social and health contributions, while still demanding quality healthcare?

I'm very proud of what we've accomplished, both in healthcare and across various sectors. I can back this up with evidence. I'm the first prime minister in history-at least from what I know of history-who has undergone surgery twice in a public hospital. Can you imagine being able to do that when the government was run by 'doctors'? Back then, no one could even enter for a surgery.

A lot has been achieved, but everything will only truly matter to me when you, as pensioners, can feel that no government can ever give you what you genuinely deserve. It's simply impossible. However, I want you to be able to say that the government made every possible effort for you, and that's what matters most in the end: the awareness of your rights and respect. That meager support was a sign of disrespect, and that's the reality we face.

Thank you very much for your patience. Thank you very much for your attention. I'm very pleased that we will take another very important step, as we also have another issue concerning about 40,000 people who are retiring from the former cooperatives. This is another story, and there are 3,000 legal cases opened each year due to the shock of how this calculation is made-3,000 legal cases a year. We will create a law that provides for automatic recognition of years of work before '94, which again is a direct burden on the budget. But at the end of the day, thankfully, our economy is functioning, and the economic climate is favorable, and economic growth continues and will continue even more in the coming years. This is my optimism regarding pensions, and the goal is to condition the government by law so that when there is extra economic growth, pensioners are the first beneficiaries of this increase. It's not a matter of what we have predicted; it comes from rising investments, tourism growth, and other factors, which have consistently exceeded our forecasts. Therefore, in that "above," pensioners should be the first beneficiaries. This is what I want us to achieve, and you can be sure we will.

You know me better than anyone else, as you are the best experts in politics. That's why I tell all those around me, don't waste your time watching debates on television, don't waste your time listening, as it will only confuse you. Do something more constructive during that time, you know why? Because in Albania, I'm telling you, there's a significant mass that poses a problem for pensions, which is very large, but it guarantees a politics where there are no analysts, or whatever you want, selling you soap as if it were cheese. So, stay calm, don't tire yourselves out. Those words that make so much noise on those screens, they fade away. They don't stick at all, and those who don't understand it, it's better for them not to understand it since that's not our concern. But I wanted to tell you that you know me very well, and you know very well that I measure every word I give. This job is such that you cannot keep your word at the moment you want to keep it because things happen, but the important thing is not to forget the promise made.

Thank you very much!
I hope you leave here a bit more cheerful than when you arrived, because I saw that at first you had indexing on your mind and were looking at me as the person who came to tell you stories after increasing the pensions. Indexing has nothing to do with it. Indexing is 100 million euros, but that's another matter. It's how we did it, or how we didn't do it; you have that from the law that is written there. The calculation machine is set: how much is it? Well, 4.1% is taken. One time it's 3.8%, another time it's 4.1%, another time it's 4.6%. It doesn't matter. In fact, we did it twice in one year. We raised it to 9.6% precisely because we saw that prices were hit by the war. This is what we did, that we did it twice. That's another part. I saw you, because I've been following, I've been listening; they told me, please let's come out and say no, don't come out to say that. We have nothing to say anymore. We will come out to talk about pensioners when we have a lot to say, however not to say that, look, these people are just messing around. I saw that this 4.1% thing has weighed them down, so I tell all pensioners that 4.1% is something entirely different. That is yours; it has nothing to do with what the government does or says. It comes as a result of measuring every year and it adds up for you, but we are here for what we will do. Outside of this 4.1%, we will talk throughout this month with all pensioners across Albania, to explain things well, so everyone understands that this is a plan and this plan will be implemented step by step, starting at the end of this year and continuing every year by raising the ambition and go up the stairs.

Thank you very much!

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