Korça is the next city to host an open dialogue with pensioners concerning the new pension plan and the government’s commitment to integrating pensioners into the country’s economic development. Prime Minister Edi Rama, accompanied by the Deputy Minister of Economy, Culture, and Innovation, Olta Manjani, the Director of the ISSH, Astrit Hado, and the Chairman of the PS Parliamentary Group, Niko Peleshi, engaged in an informative and constructive discussion with pensioners from the region. The dialogue addressed several important issues related to pensions, including the significance of contribution payments, the fight against informality, the declaration of actual wages, and the new calculation of pensionable years, among others.

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Prime Minister Edi Rama: Thank you very much for your warm welcome and for your significant presence here today!

I am truly pleased to have the opportunity to pause here today to continue this important discussion, and I want to begin by addressing the reason we are gathering for this conversation. This is not a discussion we have had in the past, and you are well aware that you are particularly attentive to political matters. Previously, neither I nor my administration ever made promises about increasing pensions. We have only stated that our primary goal is to raise pensions, which is also the most challenging objective to achieve, given the limited economic possibilities we have faced. Meanwhile, the legacy in all areas has been problematic, and particularly so in the field of pensions, where the situation has been dramatic.

Thus, it has taken us a considerable amount of time; this is true. A long time for all of you, but not a long time in terms of how the pension system functions. It is a widely recognized fact that a poorly designed pension scheme can cost an entire generation. An entire generation suffers due to a bad pension system, and this is universally acknowledged. The pension scheme we inherited was not merely poorly constructed; it was a scandalous system, without any consideration for the future of pensioners. I am sure you remember that when we took office, the pension situation was very hopeless because a ceiling had been set at 24,000 lek. Regardless of the contributions individuals had made, they could not receive more than 24,000 lek; there were no pensions above that amount in 2013. All pensions were 24,000 lek or less. The average pension at that time was merely 105 euros.

Without even mentioning the minimum pension, which was not received by everyone, we found out tens of thousands of pensioners without any pension. This was primarily due to individuals who had not contributed to the scheme for even a single day, such as housewives or men who had made no contributions. Consequently, they received no pension.

We enacted a reform that abolished the previous ceiling of 24,000 lek, allowing us to have pensioners today who receive pensions of 300,000, 350,000, and even 400,000 lek, thanks to their contributions.

Furthermore, there is a notable distinction between teachers who retired before 2014 and those who retired afterward. Due to the reform, those who retired after 2014 have higher pensions than their counterparts who retired prior to that year. This illustrates my point. We can express our aspirations and discuss the necessity of these changes, but we cannot ignore the facts. Facts are facts, and here in our country, in the forums where debates take place, a battle over facts has erupted from all sides, with every opinion and any falsehood presented as fact. However, facts are not opinions. This is why it is said that a pension scheme reflects the cost of a generation, for better or worse, and the most significant and ongoing burden of that legacy is what pensioners have paid and continue to pay.

When we took on this responsibility, the country’s total production—the entire economic output of Albania—was under 10 billion euros. Today, it stands at 24 billion and is approaching 25 billion euros. Therefore, we have increased the economic volume of the country by two and a half times.

Salaries have increased significantly, and when it comes to overall production growth and salaries compared to our neighbor countries, we rank first in the region. The average salary for teachers today is 950 euros. For those in the public sector, social security contributions are secure because the state collects them immediately and pays salaries after deducting these contributions.

When we took office, there were 520,000 contributors in the pension scheme, and we have increased that number to over 800,000. This means we have nearly 300,000 additional contributors in the system. Consequently, the pension scheme, which previously guaranteed a total of 510 million euros, now collects 1.3 billion euros. However, this is still insufficient; to fully fund pensions because we need 1.8 billion euros. The difference of half a billion euros is covered by the state budget to provide these pensions.

The annual indexing is set at 4.1%, based on a law that the government applies each year. This percentage is not arbitrary; it is calculated in relation to price increases. Each year, we perform indexing to adjust for normal inflation that accompanies economic development. The rise in prices reflects the country’s progress, and we index pensions because they do not increase at the same rate as salaries. While we have implemented this indexing, it is important to note that pension adjustments do not happen in the same way as salary increases.

This issue is particularly significant given the increase in the number of pensioners. In 2013, we had 570,000 pensioners; today, that number has risen to 705,000. This increase is due to longer life expectancies and the growth in pension payments, both in terms of volume and monetary value. These are crucial facts to consider.

I want to emphasize that when you hear about salary increases, you should be the first to celebrate, as every salary increase also leads to a larger pension fund. A higher salary results in greater contributions to social security. If salaries did not rise, the challenges facing the pension scheme would be much more severe. As I mentioned, the fund was previously 510 million euros and is now 1.3 billion euros—more than double. And where does this come from? It comes from salaries.

We are having this discussion today because we now have the opportunity to begin increasing pensions, and we will start that process. This conversation is not meant to imply that pensions will not rise, despite the challenges we face. I have been clear with you: this is the primary goal of the Socialist Party, representing the overall economic growth that leads to increased salaries. However, I have also stated that we are not yet in a position to implement significant increases. While we will index pensions, we cannot make more substantial interventions at this moment. Today, we can talk about possibilities. Why? Because this year, if we take a closer look, we are seeing an increase in revenues, but we must remain very aware of our circumstances.

We have opened negotiations with the EU and are at a historic moment when the conditions have aligned in a remarkable way, enabling us to raise our national flag in Brussels and work towards making Albania a member of the EU. This means joining a family where each member may not move freely but progresses gradually, with guarantees that no other nation has.

Now, let’s turn to our reality and the challenges you face, which we also share, and for which we need to start finding new solutions.

From the increased salaries in the public sector, we are collecting more social securitycontributions, which is one aspect.

What is happening now? We are witnessing that, following our efforts to increase contributors—from 520,000 to 810,000—most of these new contributors come from the private sector, many of whom were previously unregistered. This shift has broadened the pension scheme’s base, ensuring more people are contributing to social security.

We have also seen another increase in contributions as wages became more transparent, revealing that real salaries were significantly higher than those declared. We are now experiencing a rise in real wages, but there is still some concealment in various sectors. For instance, it is widely known that in construction, there are no salaries of 500, 600, or 700 euros.

In the construction industry, salaries range from 800 to 2,000 euros, depending on the profession, but construction workers do not earn 600 or 700 euros—such salaries simply do not exist. Today, the construction industry is more focused on finding workers than on how much to pay them. Yet, the declared figures show salaries of 500-600 euros.

The same situation applies to the tourism sector. In tourism, salaries of 400, 500, or 600 euros do not exist. Salaries in this sector today are comparable to those in Greece.

This year, we have begun to see a trend of workers returning from Greece to work in our tourism industry because they have their homes here, transportation is much easier within their cities, and, of course, taxes, rents, and other obligations are not the same as in Greece. As a result, they end up with much more savings  at the end of the month.

The same applies in other sectors.

I want to emphasize this for everyone to hear, will no longer accept such declarations.

The General Directorate of Taxation sent a notice ten days or two weeks ago to all businesses and companies, reminding them that when declaring salaries at the end of the year, they must not defraud pensioners but should declare the actual wages. If we receive declarations from construction companies, tourism operators, or other sectors that do not reflect reality, those declarations will be returned with a warning: “Review it again, and understand that if you do not correct it, the consequences will be penal rather than just civil, as this constitutes tax evasion and, for us, amounts to theft from pensions.”

We believe this will generate more revenue for the scheme, but I am not saying that it will fully resolve the issue. I am not saying, “You will wait here now because this will fill the gap.” It will not fill the gap, but the more we collect beyond this 1.3 billion, the better, given that we currently face a shortfall of 500 million with our pensions. If we want to increase pensions year after year, we need to collect more from contributions to ensure that the overall volume aligns with the growth trend.

Secondly, in our discussions, we have reinforced our belief in two key points: first, that with increased life expectancy, we should consider extending the time before retirement. This means providing opportunities for individuals to work longer, as many pensioners express a desire to work and feel capable of doing so, particularly those receiving minimal pensions due to having only 14 years of contributions.

For instance, we have many pensioners who are self-employed. They have retired, and they benefit from the social security scheme, and at the same time, as self-employed individuals, we have made an intervention to remove their social security obligations.

Lastly, regarding the bonus, we do not have it finalized yet, but certainly within a short time—within days—we will notify you about how the year-end bonus will change. The adjustment of the year-end bonus marks the beginning of our review process concerning all measures we implement in relation to pensioners and pensions.

Starting next year and moving forward, we are committed to strengthening the system to help us provide better pensions. Additionally, from the economic growth we achieve, a portion of the revenues will go to pensioners as bonuses—not just the year-end bonus, but more frequent bonuses that are more substantial. Together, these measures will lead us to a much more positive situation, with a perspective where pensions will increase consistently, year after year.

This is our goal, and we will make it a reality.

To conclude, let me say that this is like justice: no other force in this country could have accomplished what is being done with justice, and no other force can do anything positive for pensions and pensioners, other than the Socialist Party.

That is what I wanted to share, but of course, we’re here to listen to you as well. So, anyone with something to say—a question, concern, or even a criticism—feel free to speak up. We’re used to criticism and are here to listen.

You are welcome.

– Thank you very much, and we’ll be sharing the specific data with you very soon.