Social Security System: A Case Study

The reform of the social security system, which has begun to be implemented, has made visible changes in some parameters of the system. Among the most important is changing the formula for calculating the pension. The removal of the upper limit of the retirement provision has brought a significant change in the amount of pensions set after 1 January 2015, a change that goes up to 7 000 ALL (49 GBP) a month more for the same retirement pension until 31.12 .2014. This increase looks artificial due to the fact that it is artificially interfered with indexing coefficients for which has not been followed the same rate of assessment. Significant change in the size of the pension as a result of changing the way of calculating the pension will affect the social security costs, while there is no significant change in the number of contributors. In addition, this also affects the creation of disparities in the treatment of pensioners and a non-positive social impact in relation to existing pensioners. The timely adjustment of pensions is one of the methods used in such moments when there are changes in the
ways of calculating pensions. Therefore, even in this case, the revision of the possibilities for an intervention in the retirement measures set up by 31 December 2014 for some pension categories would alleviate the social impact of this population coefficient.
One of the financial indicators of the social security system, which are closely related to the performance of the social security system, is the rate of dependency, or the ratio between the number of beneficiaries and the number of contributors. The attention of the entire social security system and its links should focus on avoiding contributory evasion. The digitalization of the system of keeping the contributory obligation, by creating a central register for all contributors, by closely linking the social security number, avoids all possibilities for abuses in the social security system. Creating such a register would serve for a detailed analysis of the financial situation for the future. Creating such a database for all contributing categories as well as for all beneficiary categories would serve for accurate statistical analyzes both for today and for the future. Also, differentiating spending on each benefit or compensation scheme, as the digitalization process of the entire system is ongoing, would make it possible for a full transparency of the spending of funds, such as those intended for the state budget as well as those planned for the social security budget.
Changes made to the Social Security Law have not changed the pattern of social security funding and how the system operates.
Again, the social insurance scheme operates under the PAYG principle, while there are some supplementary schemes that operate in the insurance market. Of particular importance is the need to participate in the contributory system of all employees, both in the state and private sectors. In this process, the role of all factors influencing the reduction to the elimination of informal work must be interlinked. Increasing participation in the compulsory social security scheme, in a system where the number of working-age populations accounts for about 64% of working age population (aged 15-60), is an important element for the financial sustainability of the scheme. Therefore, more and more attention should be paid to the fight against contributing
evasion.