Social security legislation in Albania

AutoreIlir Kaduku
I. Kaduku
Social security legislation in Albania
S: 1. Overview. 2. Background, History, Legislation. – 2.1. Albania gen-
eral data. – 2.2. Background of Social Insurance. – 2.3. Financing of SII Budget.
– 3. Participation. – 4. Contribution Rates. – 5. Pension Rates. – 6. Short-Term
Benefit Rates. – 7. Financial and Social Sustainability. – 8. Assessment of Cur-
rent Performance. – 9. Objectives. – 9.1. Government Mission. – 9.2. Public
Sector Mission. – 9.3 Transition Mission. – 10. Conclusion. – 11. Summary.
1. … post-transition participation in formal labor markets has fallen
dramatically in Albania, raising questions of whether the social insurance
framework is in fact the appropriate structure for providing social protec-
tion benefits in the future for the entire population. A number of bodies have
completed extensive reviews of the social insurance system. These reviews
conclude that the existing system is not financially sustainable in the longer
term. Within the Government, the Ministry of Finance, the Ministry of Labor
and at the other side the World Bank, there is general agreement over the
need to redesign the existing pay-as-you-go system, but nothing was done
218 Annali della Facoltà di Giurisprudenza di Taranto — Anno IV
- Total area 28.748 km2; Population 3.6 million; Over 1 million Alba-
nians lives abroad;
- General Background: Fertility rate 2.27 ; Life expectancy at birth 77.9
years; unemployment rate 13.5 % ;
- Social insurance system: Actually, in operation there are 1st and 3rd
pillar (1st pillar is operated by SII in PAYG system) ; Pensioners paid out
approximately 530.000; Contributors in the scheme approximately 650.000.
2.2. The Social insurance system in Albania is in part inherited from the
past and was designed to provide comprehensive insurance against the risks
of old age, disability, death, short term illnesses, poor health, and unemploy-
ment based on contributions made by both employers and employees.
Background of Social Insurance:
• First legal act related to social insurance area - Act “On Civil Pen-
sions” no. 129, date 28.10.1927.
• Establishment of the pure social insurance system dates back to August
1947, and comprised two schemes:

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