Dear Members of “Credins Pension” Fund,
In fulfillment of legal obligations deriving from law no. 10197, dated 10.12.2009 “On Voluntary Pension Funds”, as well as the bylaws issued under its implementation, the management company “Credins Invest” sh.a., has updated the Prospectus of the “Credins Pension” Fund.
The Prospectus update consists of:
The object of the Company’s activity is:
– Administration of Collective Investment Undertakings with public offer;
– Administration of Alternative Investment Funds only for Professional and Qualified Clients;
– Administration of Voluntary Pension Funds.
The full prospectus of the Credins Pension Fund is published on our official website www.credinsinvest.com
Thank you,
Credins Invest
Date: 29/07/2021
Credins Invest has published the summary annual report for 2020 which presents the performance of the funds throughout this year. The report provides an overview of the activities carried out during the year, social responsibility, the progress of the company’s activity and the challenges ahead.
Dear clients of the Pension Fund and the Investment Fund,
We would like to inform you that within the month of August 2021, anyone who has changed or not deposited data such as: contact number, residential address, e-mail address, valid identification document or tax residence, is kindly requested to come at Credins Invest Sh.a. office or at any branch of Credins Bank to update their personal data.
For any questions or further information, you can contact us at contact@credinsinvest.com or at the contact number:
069 60 60 058
Thank you,
Credins Invest
When you are young, saving money seems like an impossible challenge. During the young age, it is easier to see your salary as a way to reach the end of the month and not as a way to save and be prepared for the future. However, by putting aside small amounts of money each month, saving can come back to your advantage and make a difference. We have put together a list of 5 tips for young people on the art of saving, to help them embark on a successful financial journey!
Five ways to save money at a young age:
1. Keep track of your monthly expenses!
Of course, this is one of the most common tips anyone can give you, yet it remains one of the most valuable. Keeping a budget does not mean to give up the fun in your life. By organizing your budget, you are able to monitor where your money is going each month. You have the opportunity to organize money smarter, for savings, bill payments and entertainment. There are many ways to maintain your personal budget. Some prefer to use applications, some others keep notes manually, where they set all the monthly expenses and monitor the progress of the expenses month by month. Whichever way you prefer, budgeting tells how much you can afford to save, even in very small amounts, even though it may seem impossible.
2. Do not wait until you have a higher salary!
Saving and investing may seem like a challenge now, but putting aside a small amount of money every day/week/month can have a big impact. Use your budget to see how much savings you can put in your account. For example: if you want to achieve a goal 5 years later, investing in the “Credins Premium” investment fund may be the right alternative for you. You can start with the minimum amount of 2,000 Lekë per month, by investing periodically for the future.
3. With a little organization you can save 1/3 of your income!
If you work and generate income, but you are not sure how much money you want to save, we recommend that you put aside one-third of your income. By saving 100 Lekë for every 300 Lekë you earn, in the future it is easier for you to overcome financial challenges, such as a job loss, health emergencies, car repair or unexpected expenses.
4. Start an emergency fund!
Another good way to save, is to create a fund that will only be affected in emergencies, so you are never without money when you need it more.
5. Repay debts gradually!
If now, saving seems something impossible due to debts, then conditions must be created for their repayment. Passing all the attention to debt repayment, helps you later to have the opportunity to start saving, as the habit of gradually putting aside money has been established.
These are just some of the tips that can help keep personal finances under control and improve your finances, if you start to implement them. It all starts with creating a healthy habit, which is good for the future finances.
Dear Members,
In fulfillment of legal obligations deriving from law no. 10197, dated 10.12.2009 “On Voluntary (more…)
Mrs. Estela Koçi, general director of the fund management company, Credins Invest, in an interview for Monitor magazine, says that fiscal incentives for promoting the development of private pensions today, are insufficient. According to her, a higher limit of exemption of contributions from personal income tax and profit tax, is needed for employers. Mrs. Koçi says that voluntary pension funds as a third column can be a solution to the pension problem for Albanians. She thinks that this column, as in developed countries, will be complementary to the two main, mandatory columns. You can read the full interview below:
How would you assess the performance of your pension fund in 2020?
For several years in a row, the Credins Pension Fund ranks first in the market according to the number of members and the second for the volume of assets. On 31.12.2020, the Credins Pension Fund had approximately 18,000 members and an asset value of about ALL 1.1 billion, holding 57% and 30% of the market in number and value, respectively. Although 2020 was an extraordinary year because of the pandemic, the Credins Pension Fund grew by 31% in value and 3% in membership compared to a year earlier. There is a slowdown in the growth trend compared to the last 3 years, where the increases have been significant both in number (on average over 20% per year) and in value (on average over 50% per year). But considering the difficulties of 2020, maintaining the upward trend is a very positive indicator. The crisis did not affect the existing portfolio of members, who continued to contribute to their voluntary pension account. The effect of panic on the members of the pension fund was not felt at all, and consequently, there was no withdrawal of funds as a result of the state of emergency. In general, members of pension funds are consistent and aware that investing in these funds is long-term and has a defined retirement age. Moreover, because of the pandemic situation that increased humanity’s insecurities about the future, our members say that having a savings account for retirement, has had a positive impact, making them feel more protected for the future. Even the employers who have created professional schemes for the employees in the Credins Pension Fund, have not stopped their contributions in 2020 and onwards, and this is another positive indicator for the fund.
How much was the private pension market affected by the effects of the pandemic and the economic crisis?
Based on the data, the fact that the market has had an increase in key indicators, despite the state of emergency, shows that the performance has been positive and generally unaffected by the crisis. But, of course, the upward trend in both value and number that this market has had in recent years (2019: 47% increase in number and 27% increase in asset value) has declined in 2020, especially the number of young members. The fact is related to the state of the pandemic, due to which direct contacts with the public were limited to raise awareness towards membership in voluntary pension funds, despite the measures taken by Credins Invest for a normal course of information and transparency to the public. Also, financial difficulties and uncertainties about the progress of the pandemic made individuals and companies, more cautious about the spending process, a wave which is felt in the first quarter of 2021.
What was the return on investment trend for 2020? How did the crisis affect this indicator?
The Credins Pension Voluntary Pension Fund has been operating in the market since 2011, and this fund has generated a positive net return of 4-5% per year on average. Pension fund assets are invested in securities issued by the Government of the Republic of Albania, mainly long-term securities for the very long-term nature of the pension fund. For this reason, the performance of the Fund’s rate of return and the quota price is affected by the volatility of interest rates in Albanian Government securities auctions. Government securities rates are characterized by low volatility and therefore, fund price movements are minimal. The Credins Pension Fund is conservative in terms of the securities that make up the portfolio and, consequently, is unaffected by crises such as the pandemic. Changes in long-term securities rates during the year have slightly affected the decline in the annual rate of return. However, the pension fund is a product of long-term financial investment and the essential element is long-term sustainability. Pension fund members expect benefits over a period of 30-40 years, and minimal changes in the yield curve of government securities over the years of accumulation do not significantly affect the performance of the pension fund.
What are your assessments regarding the draft law “On Voluntary Pension Funds” that was submitted for consultation last year?
The law in force, which regulates the activity of voluntary pension funds, is law no. 10197, dated 10.12.2009. Since this time, 11 years, the law and bylaws in its implementation, have remained unchanged, while the voluntary pension market has had positive developments and has constantly sought to review and improve the legal framework. The demands come from the long experience of management companies, as law enforcement in practice and the regulations issued in its implementation, as well as from the growing demands of clients to have other incentives. In many aspects, law no. 10197 can be considered outdated. First, what is noticed is that voluntary pension funds continue to be treated as independent and not as part of the overall pension system in Albania. It is regrettable that there is no long-term strategy to address the major problem of the pension system in Albania. The initiative of two years ago, to develop the private pension system and specifically the mandatory private column, seems to have been left in oblivion again. It is a fact that the first column or mandatory state scheme in Albania is not self-financing, there are currently more beneficiaries (pensioners) than contributors (employees who pay social security contributions) and the ratio is projected to increase to 140% in 2040, according to demographic forecasts.
On the other hand has been approved the Law no. 29/2019, dated 23.05.2019 “On the supplementary financial treatment of employees who have worked in underground mines, employees of the oil and gas industry and employees who have worked in metallurgy”. The law was approved by the Albanian Parliament, dated 20.06.2019, and has not yet been completed with bylaws for its implementation. According to this law, for the employees of 3 categories of difficult professions, miners, metallurgists and oil workers, who belong to the age of under 48, additional contributions will be paid in the amount of 5%, in the private pension schemes, divided between the employer and employees. This will enable these categories to benefit from a more complete financial treatment, an additional pension in addition to the state pension. The law aims to cover with benefits before the time of reaching the retirement age, as well as additional benefits over those granted by law no. 7703, dated 11.5.1993, “On Social Insurance in the Republic of Albania”, as amended. The sooner the legal framework under this law is completed and harmonized with the legal framework of pensions, the sooner its implementation will begin, and sooner the burden on these categories in the state budget will begin to be eased. The third column, voluntary pension funds, cannot be claimed to be the solution to the pension problem for Albanians. This column, as it is in developed countries, will be complementary to the two main columns. However, there is still much room for improvement in the legal framework for voluntary pensions, with fiscal incentives being the main focus.
Overall, the essence of the changes introduced in the new draft law is the improvement of problems arising from the implementation of the law in practice and updating with international provisions governing the activity of voluntary pension funds. Despite the positive changes, in my opinion they are not enough to further develop the pension market, which although it is 10 years old, is already quite negligible compared to the potential. Through the Association of Insurers, Pension Funds and Investment Funds, for more than a year, management companies have submitted opinions and suggestions on the draft law on voluntary pension funds. This document presents an analysis of different Balkan countries and presents some proposed scenarios for the fiscal treatment of the benefits from the voluntary pension fund in Albania. Specifically, the market has demanded a higher limit on the exemption of contributions from personal income tax and profit tax for employers. The limit proposed by the new draft law is still low, considering that it has been unchanged since 2009, and the more time passes, the more insufficient it becomes. Also, regarding the tax on benefits, the proposed scenarios are: 1) benefits are not taxed, when the conditions for retirement are met, ie the Exempt-Exempt-Exempt system, or 2) the progressive tax system is applied as on income from salary, or 3) the tax is applied only on the return on investment. Also, during the last 11 years, technological developments have been significant and have significantly influenced the approach of companies towards communication with the public and customers. Some of the requirements of the law regarding transparency or communication with customers are unnecessary, in conditions when digital communication allows modern and coherent ways.
Do you believe that the current incentives, provided by law to encourage investment in a private pension are sufficient? How can these incentives be further improved?
Fiscal benefits are among the main and measurable incentives to evaluate the voluntary pension fund as the most convenient form of long-term investment, compared to any other traditional form of savings. Specifically, according to Article 88 of Law no. 10197, the contribution made by each member to the voluntary pension fund is deducted for the effect of personal income tax, which became applicable only from January 1, 2015, the date when it was reflected in the law “On income tax”, as well as in Instruction no. 23, dated 9.12.2014, “On the collection of compulsory social and health insurance contributions”.
Although after January 1, 2015, the shortcomings of the legal framework for the implementation of the 2009 law were systematized, the implementation challenge remained, causing many individuals to be penalized by being double taxed, both during the payment of periodic contributions and at the time of withdrawal from the fund. Theoretically, the individual who contributes individually, should submit to the institution where he is employed, the membership contract in the voluntary pension fund he has chosen, where the contribution is specified, which must be declared as deductible for the employee, before applying personal income tax. In practice the individual faces the refusal of the employer institution to implement the fiscal deduction of the contribution, which comes as a result of the inability to absorb the entire legal framework, to the point of irresponsibility to implement it. Whereas if each employee were part of a professional scheme with contributions from the employer, the infrastructure to enable voluntary contributions and to automate the periodic payment of contributions, would be considerable convenience and quite tangible for the individual. The number of employers who have currently created professional plans is small. Companies consider a burden on their budget an increased expense for employees, in addition to compulsory state insurance, and in conditions where membership is voluntary they simply do not take it as an initiative. So, the existing fiscal incentives are not fully enforceable and moreover, they have already become insufficient, as I explained above and as the market has expressed with suggestions to regulators and legislators.
Do you see suitable new investment instruments where private pension funds in Albania can invest?
Currently, voluntary pension funds operating in Albania have a conservative profile with a minimum level of risk, as they invest in Albanian Government debt securities, which have generated a positive and relatively satisfactory return. The current law and the draft law regulate only the illicit assets and for the moment the legal framework is not clear, including the regulations in this aspect, as the allowed assets are regulated by specific regulations, which has not yet been presented in the form of a draft consultation. The instruments allowed in the voluntary pension law and regulations have been unenforceable due to the lack of a functioning regulated market. With the start of operation of the ALSE Securities Exchange, even for voluntary pension funds, the allowed investment alternatives are added.
The specificity of voluntary pension funds is their lifespan 35-40 years from the beginning of the contribution accumulation phase to the pension benefit phase, of which no investment instrument currently meets this deadline. The Treasury bond with a maturity of 10 years is the longest-term instrument available for investment, creating a significant maturity gap along with the missing benefits of longer-term instruments. Assets very suitable for investing pension funds are real estate and infrastructure projects that have a higher life and profitability in the long run, as well as bonds with a maturity of more than 10 years, which are indexed to inflation. These are not included in the permitted assets in the current permitted investment regulation and may be the subject of discussion between the market and regulators to promote these new instruments suitable for pension funds.
On March 26, 2021, the Board of the Financial Supervisory Authority, approved and registered the Alternative Investment (more…)
Money management seems to continue to be one of the main issues that adults face difficulties. Most adults have adapted to financial habits once they have had a source of personal income that is usually from work. Meanwhile, children do not take money management as knowledge through school education, but through family education. However it seems that this situation may change. Did you know that there are different ways children today can learn more about money? Global Money Week, an initiative organized for Children and Youth, is an annual financial awareness campaign built to inspire children and young people to learn about issues related to money, lifestyle, and entrepreneurship. Year after year, participating in Global Money Week becomes even more important. Recent international data show that most young people are not able to perform very simple calculations regarding interest rates. “Financial ignorance” puts in difficulty children and young people in developing countries and economies in transition.
Many education systems around the world do not pay enough attention to financial literacy. In many cultures children are expected to learn about money from their parents or family members, but some parents are not educated about money themselves first, and in many cases have financial problems. Research has shown that the earlier children learn about money, saving and investing, the better they will be able to manage their personal finances when they are older. Financial education at an early age helps children develop the skills to make better financial decisions regarding student loans, housing, first car, travel and other expenses. These skills help children and young people understand the difference between earning, saving and spending, making them better managers, capable of practicing healthier money management habits.
There are also some practical reasons why financial education should start early. A number of children do not complete their basic education and as a result do not receive a degree, reducing their potential for a better future. In order to help these children, we need to reach out to them while they are still in school. For this reason, the focus should be on educating children in primary and secondary school. The essential elements of this approach are fully in line with the theme of Global Money Week, which this year is “Take care of yourself, take care of your money”. While the first part of the sentence relates to the current pandemic situation, the second part shows us how important money management is.
How to teach children to manage money wisely – Educating children and young people about their social and economic rights and responsibilities is essential to create a generation of adults who can make wise decisions for their future.
Saving for their future – It is important for children and young people to build healthy saving habits at an early age in order to cultivate key money management skills later in life.
How to Make Money Taking Care of Yourself and Their Families – Developing life skills or getting entrepreneurship training helps children and young people to be constantly educated and achieve their goals of having a career in the future and a job with a secure source of income, even increases the chances to build in the future their own business or have a successful career.
We believe that today’s children and young people should become economically empowered citizens, able to understand the importance of saving and equipped with the skills to find work and create a life with high standard. We want young people to learn to manage their money wisely. By empowering children and young people, we can help them transfer their knowledge to their families and community. Global Money Week is a global event, where all the actors of the society can participate and be involved in these important topics, from the youngest to the oldest.
Dear members,
We would like to inform you that the membership contracts in the voluntary pension fund have undergone some changes. Changes in membership contracts do not affect the basic contractual relationship of existing members, as they consist of completing the personal data of members or their contributors, as well as authorizing the processing of personal data and declaring this data to relevant institutions defined in the legislation in force, specifically law no. 9887, dated 10.3.2008 “On the protection of personal data”, law no. 4/2020 “On the automatic exchange of financial account information” law no. 9917, dated 19.02.2008 “On the Prevention of Money Laundering and Terrorist Financing” (amended);
The information of the members and the access of the online account is mentioned in the new contract, as well as the fiscal treatment of the benefits. As above, the existing members have no additional obligations, as a result of the change of the respective contracts. You can find the amended type contracts published on our official website.
Thank you,
Credins Invest
March 19, 2021
Rovena Balla, Business Development Director at Credins Invest, in an interview at Scan TV, talks about the voluntary pension market throughout 2020. Despite the situation caused by the pandemic, the number of members and the net asset value has increased. Members in pension funds have chosen to stay invested and have not fluctuated from the situation, because they have realized that pension funds are long-term investments intended for retirement age. 2020 has been a good year for the voluntary pension market. The Credins Pension Fund consists of individuals who belong to state, private and individual institutional schemes. What we aim to promote and protect is our mission: “Maintaining the same living standard even at retirement age.” You can watch the full interview on our Youtube channel, or you can read it below:
How was 2020 for the private pension sector, while the figures speak of a significant increase, although slower than in previous years?
It is difficult with the current situation, not to worry about the future of our finances. These are exactly the difficult days we are going through, when security and the prospect of a better financial future seek to be at the top of our minds. During 2020, the number of members in pension schemes is about 31 thousand individuals out of 28 thousand during 2019. The voluntary pension market, in the last year, has resulted in an increase of 9.72% in the number of members, and 23.8% in asset value, despite the pandemic. Members of pension funds have chosen to stay invested and have not fluctuated from the situation created as a result of the pandemic, as they have realized that pension funds are long-term investments intended for retirement age. Referring to the figures, we can say that 2020 has been a good year for the voluntary pension market in terms of increasing the number of members, but also in increasing the value of assets.
The figures show an increase of Credins Pension in assets value, and a small decrease in market dominance, from 60% to 56%. Is the company focused more on quality than quantity, in terms of private pensions?
We proudly say that for years, Credins Pension continues to rank first in number of members owning 56% of the market. The number of operators for voluntary pensions, from 3 operators in 2019, has increased to 4 during 2020. Our main goal during 2020, has been to keep active clients in the pension fund by orienting them to increase the amount of contributions, based on an analysis of their income, to benefit more today from the fiscal facilities provided by law for funds, as well as to provide more income at retirement age. So, what we aim to promote and protect is our mission “Maintaining the same living standard even at retirement age.” Through the ongoing market education and financial advice we provide, the figures show that we are on the right track.
Can you tell us something more about the demographic or geographical profile of the members of the voluntary pension fund? (So which age groups or counties are most interested, what does the trend look like?)
Credins Pension members are mainly concentrated in urban areas, where it is worth mentioning the main cities of Tirana, Durrës, Vlora, Shkodra, Fier, Korça, where the economy is moving faster and the opportunity to invest is greater. Creating a long-term investment plan is often viewed with skepticism by young people whose retirement age seems too far away. They have just entered the job market, and are looking for a continuing education in order to be convinced of the benefits that this way of investing has, if you start it at a young age. The average age group of Credins Pension fund members is 35-45 years old, members who have established financial stability and basically understand the product and its benefits.
Do you have more individual or collective contracts?
The number of members of the Credins Pension fund consists of individuals who belong to state institutional schemes, private institutional schemes and individual schemes. We are proud to continue to be their choice over the years, having more than 19,000 members today. The client portfolio is mainly focused on individual clients, but from year to year, we have an increase in memberships from professional schemes. We manage institutions with a significant number of employees (> 500), who are involved in the professional scheme of the voluntary Credins Pension fund, by joining their staff and contributing for them.
Why should people invest in these funds? What advantages do they offer compared to other investment instruments?
Voluntary pension is a supplementary pension that is added to the state pension, without replacing it. Unlike the state pension, the voluntary pension fund is directly related to the contributions that the member makes to the pension fund. So, in the state pension we pay for today’s pensioners, in the voluntary pension funds we pay for our account, and at the retirement age, or 5 years before it, we have the opportunity to benefit the amount of contributions paid for ourselves, and the added value from the investment. Credins Pension started its activity on 01.01.2012, and it is worth mentioning that, the rate of return on investment since its establishment has resulted 51.66%. The earlier you start joining the pension fund, the higher your benefits will be during retirement age. The concept of “time” is a very important element of the pension fund. The benefit is reciprocal both in the case of individual contributions, when members pay for themselves, and in cases of professional contributions, when the employer pays for the staff.
Advantages of the individual from membership in the fund:
Advantages of the employer from membership in the fund:
To all those who have thought about retirement, but have not yet joined a voluntary pension fund, Credins Invest team can present you opportunities to project your future.