Albanian law boosts private pension boom with major tax breaks
Private pension funds are increasingly gaining the trust of Albanian citizens as an alternative for securing their financial future.
According to official data published by the Financial Supervisory Authority (FSA) of Albania, by March 31, 2025, the number of members in both open and closed participation funds reached 46,377, marking a 3.23% increase compared to the end of 2024, CE Report quotes ATA.
This positive trend reflects a growing awareness among individuals about the importance of additional savings for old age, beyond the state pension schemes.
Alongside the growth in membership, the net asset value managed by the 7 active funds in the market also rose to 13.36 billion Albanian lek (approximately 85.21 million euros), an increase of 3.83% compared to the end of 2024.
The new law "On Private Pension Funds" significantly increased tax benefits for contributions to private pension funds. The maximum monthly tax exemption limit is set at the level of the minimum wage of 40,000 lek, which translates into an annual exemption of 480,000 lek. Also, contributions paid by the employer on behalf of the employee are exempt from tax to the same extent.
The law also stipulates that pensions are taxed only on investment earnings if withdrawals are made through monthly payments spread over at least two years. This encourages long-term savings and strengthens support for private pensions in the country.
