Private Pensions (The Only Way to Increase Pensions System in Albania)

The private pensions market, even though it is known as a relatively new market in Albania, its study and analysis takes on a very special importance as this market is directly related to the growth of pensions as a whole. In the doctrine of financial law, three main pillars are recognized for the way the pension scheme works today. The first pillar is a state insurance system of the pay-as-you-go principle. This system is based on the principle of solidarity and continuity of generations. The second pillar is a combination of the state system and the private one, where every insured person in the compulsory state insurance scheme (the first pillar) is legally obliged to pay a part of the individual contributions to a private pension fund. In our opinion, this way remains one of the best ways for the development and growth of this market in Albania, solving at the same time a very big social problem related to the third age in our country. The third pillar is a completely voluntary system with private management, where every person who wants to have higher sources of income for the retirement period enters into an insurance relationship with these private institutions, which, through efficient management, ensure higher income large and additional benefits against the payment of contributions. This paper is a study of the private pension market in Albania and the analysis of some of its constituent elements, in an attempt to answer some important issues related to the development of this market as a whole.     Received: 05 May 2022 / Accepted: 16 May 2023 / Published: 20 May 2023