Title: Pension Reform Progresses: Addressing the Income Gap for Retirees
Introduction
Tehran – In line with the nation’s developmental goals, the implementation of a pension harmonization plan is proceeding as scheduled, according to statements from Ali Dehghan Kia, head of the Tehran Social Security Retirees’ Association. While the plan’s initial phases have been completed, a significant focus remains on bridging the gap between current pension payments and the actual cost of living for retirees.
Phased Implementation of the Harmonization Plan
As outlined in the Seventh Development Plan, the pension adjustment initiative is being rolled out in distinct stages. Mr. Dehghan Kia confirmed that the first phase, involving a 40 percent increase, and the second phase, with a 30 percent increase, have already been executed. The third phase is slated for implementation in the upcoming Iranian calendar year (2025), with its funding to be secured by the Social Security Organization and the government.
The core objective of this multi-faceted plan is to align the average pension with approximately 90 percent of the average salary of currently employed workers in equivalent roles. This strategic move is designed to alleviate financial pressures on retirees and substantially reduce the disparity between their income and living expenses.
Addressing the Challenges for Minimum-Wage Retirees
A primary concern highlighted by Mr. Dehghan Kia is the economic situation of retirees receiving the minimum pension. He stated that these individuals currently receive an amount equivalent to only one-third of the estimated household subsistence basket. This leaves two-thirds of their essential living costs uncovered, creating severe economic hardship.
“To make ends meet, some pensioners are compelled to re-enter the workforce,” Dehghan Kia added. “However, even with this additional effort, a portion of their living expenses often remains unmet.”
Proposal for a Subsistence-Based Wage Model
To tackle this systemic issue, the Retirees’ Association has formally proposed to the Supreme Labor Council that the minimum pension and wage be calculated based on the household subsistence basket. This proposal leverages a clause within the Labor Law, which allows for such a measure when official inflation rates are deemed insufficient to cover actual living costs.
“The implementation of this proposal can effectively narrow the gap between pensioners’ income and real living costs,” Dehghan Kia emphasized. “We believe it has the potential to resolve the existing income disparity within a three to five-year timeframe.”
A Commitment to Support and Stability
Mr. Dehghan Kia underscored the importance of sustained support for low-income groups, particularly retirees. He noted that the combination of high costs and inflation has made life challenging, not only for pensioners but also for young people entering the workforce with low wages.
The continued execution of the pension harmonization plan, coupled with supportive programs and a potential shift to a subsistence-based calculation model, is presented as a comprehensive strategy to improve the living standards for this vital segment of society and ensure their financial stability.