Perceptions of the contributors about the social security and pension scheme in Albania: Key factors that affect its quality

Abstract

Pensions are an important element of social protection in Albania where the pension system is based on the mandatory public pillar and the supplementary pillar. As well as in other countries, quality of the social security system in Albania is affected by the degree of economic development of the country, labor market, unemployment rate, fiscal policies, etc. Since 1993, the quality of the system is believed to be the subject of important, but insufficient reforms. Different demographic factors affect the type of the reforms that such a system should pursue, as well as the continuation of the PAYG system, i.e. the transition to a fully-funded scheme, the one based on contributions, or the implementation of an Alternate Scheme with a three-pillar system pension scheme. The study attempts to assess the quality of the current situation, regarding social security, identifies the factors that condition the stage of its development and determines the opportunities for future improvements, in terms of demographic structure, unemployment, number of contributors and beneficiaries, etc. In the study, survey method was adopted using both qualitative and quantitative data which were collected via a questionnaire and a semi structured interview form developed by the researchers. The participants were composed of randomly selected individuals aged between 25-35 years and they were from various businesses in the Tirana District. The results have showed that the social security scheme in Albania shows problems and does not work well, therefore reforming it is more than necessary.