The government approved on Wednesday the decision on 4.1% pension indexation, the Minister of Economy, Blendi Gonxhja said in a statement to the media after the end of the meeting of the Council of Ministers.

He said that the indexation aims to preserve the purchasing power of the elderly and the challenge for the government remains the increase of pensions, while a discussion for the pension scheme will start in the middle of October.

"Government's decision on pension indexation 4.1 percent. It starts with the October payments. 791,257 pensioners benefit, according to the current number divided into these two categories, pensions from the mandatory scheme and pensions from special programs and treatments such as military or mining workers,” said the Minister.

“As for pension indexation, the effects are calculated at Euro 1.693 million only for the remaining three months of 2024,” said Gonxhja.

“Indexation aims to preserve purchasing power. The government is focusing on the challenge of increasing the income of pensioners so that we can have a life as worthy as possible for them. We are studying ways to have a review of the scheme and the possibility of having an increase, starting with the increase of the year-end bonus. In the middle of October, a process will start where the revision of pensions will be seen," he said.

The Albanian pension system is a defined benefit system funded by contributions, with state funding covering the deficit.

In 2015, Albania implemented a pension reform package with the objectives of improving the fiscal sustainability of the system, strengthening the link between contributions and benefits, and improving coverage. The measures that were initiated in January 2015 were mainly in three areas: (a) parametric reforms to the existing defined benefit scheme, (b) revision of pension arrangements for special groups of workers, and (c) introduction of a noncontributory social pension.