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46 thousand Albanians contribute to private pension

2025-06-05 08:28:00, Ekonomi CNA

The voluntary private pension market grew further in the first quarter of this year.

Data from the Financial Supervisory Authority (AMF) shows that the market approached the 46 thousand member limit. During the first quarter of the year, the number of fund members reached 46 337 members, an increase of 3.3% since the beginning of this year and 16.3% compared to the same period last year.

The number of individuals participating in private pension funds is growing at a steady pace and is at historically high levels. However, the penetration of these schemes in society still remains very modest. The number of individuals contributing to a private pension remains at approximately 3% of the total number of employees in the country, which indicates a still very low level of coverage by private pension funds.

The value of pension funds' net assets at the end of March reached 13.36 billion lekë, up 3.8% since the beginning of the year and 88.4% compared to the same period last year. Pension funds' assets are mainly invested in Albanian government bonds. The private funds market still remains the smallest segment of the financial market in Albania.

At the end of the first quarter, six private pension funds were active in the market, managed by four management companies.

According to the number of members, the largest player in the market is Credins Pension, with about 42.13% of the total number of members, followed by Sigal Pension with 34.84%, Raiffeisen Pension with 10.35%, Albsig Pension with 10%, Smart Pension, with 1.4% and Sigal Pro, with 1.27%.

By net asset value, the largest fund is Sigal Pension with 38.54% of the total, followed by Credins Pension, with 30.71%, Raiffeisen Pension, with 20.49%, Albsig Pension with 8.88%, Smart Pension, with 0.97% and Sigal Pro, with 0.4%.

The new Law "On Private Pension Funds" has brought a significant increase in fiscal incentives for contributions to private pension funds.

The maximum monthly tax exemption limit will be increased to the level of the approved minimum wage, which currently stands at 40 thousand lek per month. With the current minimum wage level, the amount of contributions exempt from taxes would today reach 480 thousand lek per year or 140% more compared to the current threshold of 200 thousand lek. Private pension contributions paid by the employer in favor of the employee will also be exempt from tax to the same extent.

The law also provides that pensions are not taxed on the contribution portion, but only on the return on investment, provided that the withdrawal is made in monthly payments spread over at least two years and not immediately, after meeting the legal conditions for receiving a private pension./ Monitor Magazine