Apr 25 2024
Emanuel Salinas, the World Bank Country Manager, recently discussed the ongoing pension reform efforts in Albania in an interview with Monitor magazine. Salinas provided insights into the collaborative work between the World Bank and Albanian authorities to address challenges in the public pension scheme.
Salinas highlighted the World Bank's involvement in the process, stating, "The value adds we bring to the discussion is the use of our actuarial-based model to carry out long-run financial projections of the pension scheme and the international experience on pensions." He emphasized the importance of balancing coverage, adequacy, fairness, and sustainability in pension policy.
Regarding suggested interventions, Salinas pointed out areas for improvement, including the low coverage of the current labor force and the fairness of the system. He stressed the need to incentivize contributions while ensuring affordability and fairness across generations.
In response to demographic changes and projections, Salinas discussed the challenges posed by an aging population and decreased fertility rates. He recommended focusing on supporting longer careers, investing in healthcare for older adults, and ensuring income security for retirees.
When addressing potential changes in pension indexation formulas, Salinas cautioned against hasty adjustments that could impact fiscal sustainability. He emphasized the need for a comprehensive approach to address structural challenges in the pension system.
Regarding the protection of pensioners from benefit reductions, Salinas highlighted the importance of understanding the reasons behind inadequate pensions, such as gaps in contribution history and labor market challenges. He suggested measures to improve pension education and enhance job opportunities for older workers.
In conclusion, Salinas emphasized the significance of strengthening social protection for pensioners to prevent poverty among older adults. He underscored the need for a holistic approach that combines social assistance, insurance, and labor market programs to ensure the well-being of retirees in Albania.