Title: New Pension Reform Aims to Stabilize Retirement Incomes and Bolster National Funds
Introduction
In a significant move to secure the financial future of public sector employees, the Iranian government has approved a new bill designed to reform pension calculations. The initiative, announced by senior officials, focuses on ensuring a smoother transition for individuals moving from employment into retirement while simultaneously strengthening the nation’s pension funds.
Key Changes to Pension Calculations
The core of the new bill involves an expansion of the income types that will be subject to pension deductions. Previously, various allowances and bonuses were excluded from these calculations. Under the new framework, components such as overtime pay, hardship allowances for less developed regions, non-mandatory teaching fees for educators and faculty members, shift differentials, and a portion of welfare benefits will now be included when determining pension contributions and, consequently, future retirement benefits.
Official Rationale: Bridging the Income Gap
Alaeddin Rafiezadeh, a Vice President, officially announced the reform. He explained that the amendment to Article 106 of the Country’s Civil Service Management Law was developed with two primary objectives: to prevent a significant drop in income for employees upon retirement and to reinforce the financial resources of the country’s pension funds.
“Currently, many payments that employees receive during their service, including overtime and welfare benefits, are not subject to pension deductions,” Rafiezadeh stated. “This very issue has led to a substantial reduction in income during the retirement period. The approval of this bill will not only reduce the disparity in income between active employees and retirees but will also strengthen the sustainable resources of pension funds.”
Long-Term Stability and Legislative Harmony
The Vice President further emphasized that the reform would create greater consistency across different sectors. He noted that upon ratification by the Islamic Consultative Assembly (Parliament), the bill would harmonize the pension deduction rules for civil servants with those already in place for employees under the Labor Law. This alignment reduces the need for creating separate protective legislation and is characterized as a crucial step for guaranteeing the long-term stability and health of Iran’s pension system.