Pension system in a comparative analysis

• Author: Bora Angjele
• Pages: 181-187

Vol. 3 No. 2

July 2017

ISSN 2410-3918

Acces online at www.iipccl.org

181

Academic Journal of Business, Administration, Law and Social Sciences

IIPCCL Publishing, Graz-Austria

Pension system in a comparative analysis

Bora Angjele

Abstract

This article is about the reform of the pension system in Europe and Albania.The social security

system in Albania has evolved. The system's initial format was comprehensive, covering third-

party risks, disabilities, head of household death, short-term illness, and maternity leave,

unemployment, and health costs. These benefi ts were fi nanced through payroll contributions

and were assessed by both the employer and the employee, but at di erent rates for various

benefi ts. However, our country as well as many other transition countries has experienced an

increase.Level of labor informality has led to limited income from wage contributions, while

facing the burden of supporting older generations, many of whom enjoy full pension rights.

Albania has managed to avoid a fi nancial crisis in the social security system. In the current

model of the pension system there are major defi ciencies. The article introduces systems and

reforms and refl ections on the elections.

Keywords: pay as you go system, multipurpose pension system, contributory system, social

system.

Introduction

Social security, as a massive collective security scheme, guaranteed by the state, started

for the fi rst time in Germany in the years 1817-1823. On the basis of this principle, for the

fi rst time in 1839 Von Bismarck in Germany formulated the so-called social insurance

scheme on the principle of solidarity and continuity of generations, whereby all

employed persons made contributions up to a certain age backed by old people's income.

Later we fi nd such schemes in Austria in 1888, Luksuzburg 1901, Serbia 1910, Russia 1911,

Britain 1911, Romania 1912, Poland 1920, Greece 1922 etc.,. For the fi rst time the special pension

was given to writer William Shekspir in 1566. Pension benefi ts were fi rst born in France in 1910

for workers, earlier this pension existed for war soldiers (Bundo, 2012).

There is an evolution of social problems in our country and the legislation of this

problem has been developed following these social problems.

Thus, Social Security in Albania was created in 1947, but we have found elements of

social security in our country since 1923 (Kepi, 2007, 13-22).

For the fi rst time in its history Albania had a public social security system in 1927,

at the time of King Zog. The system, which benefi ted only civil servants, was set up

according to the model that was created in 1889 by the German emperor Bismarck,

the prominent German man of the 19th century. The engine of that system was the

principle of solidarity between generations.

The system today is represented by the Social Insurance Institute, an independent public

institution, run by an Administrative Council and controlled by the Ministry of Finance.