Indexation and bonus, how much will pensions increase?

2024-09-13 21:36:00, Ekonomi CNA

The announced change of the pension scheme will be preceded by the annual indexation, based on the rate of inflation. The decision is expected to be made official next month. In total, there are about 7.8 billion lek or about 78 million dollars, which will be allocated to pensioners, this includes the fund for the bonus or reward, which is allocated on the occasion of the year-end holidays. Specifically, there are about 4.1 billion lek that will be used for indexation and another 3.7 billion that will go for the bonus.

Based on the amount of the fund, but also the trajectory followed by the rate of inflation over the course of one year, the supplement, which will be applied in October, is expected to be lower than 5 percent.

As for the fund for the next three years, for the year 2025 it is planned to spend 7.9 billion ALL, or 126 million ALL more. For 2026, about 8.3 billion ALL are planned and after three years, that is, in 2027, the fund dedicated to increase pensions will be 8.8 billion ALL, recognizing an increase of almost 13 percent. But this does not necessarily mean more money in the pockets of retirees, due to the very fact that the annual fund is mostly linked to the increase in the number of people who retire. Currently, there are about 700,000 elderly people in the scheme, but in 2027 their number is expected to be higher. Under these conditions, even the fund that goes to pensioners is expected to grow.

Within this year, the new pension reform will be introduced. For months, with the assistance of the World Bank, the Government has been working on the design of a new scheme, which will amortize the problems that have appeared over the past 10 years, while at the same time enabling dignified pensions for the elderly, who are currently in the scheme but also the newly emerging ones. Prime Minister Rama himself, in a public appearance, announced that with the revision of the scheme, there will no longer be pensions below the limit or threshold of 150 euros. Currently, there are about 140,000 elderly people, mainly in rural areas, who have a pension amount of less than 150 euros per month, and who will be affected by these changes.