Iranian Government Approves Landmark Pension Reform to Safeguard Employee and Retiree Incomes
In a significant move to secure the financial future of its workforce, the Iranian government has announced a new payment plan designed to prevent a sharp decline in income for employees upon retirement. The reform, hailed as a major step towards payment system equity, was detailed by Ahmad Meydari, the Minister of Labor, Cooperative, and Social Welfare.
A Structural Overhaul for Pension Equity
The newly approved bill amends Article 106 of the National Civil Service Management Law. Minister Meydari emphasized that the primary goal is to prevent a reduction in employees’ income after they retire. This decision, he stated, is a direct implementation of the country’s overarching social security policies, which aim to eliminate unjust discrimination, create a comprehensive and efficient social security system, and establish uniformity and fairness in insurance regulations.
Key Changes: What’s New in the Calculation
The core of the reform lies in revising how pensions are calculated. Previously, certain allowances were excluded from the base used to determine retirement benefits. Under the new plan, items such as:
- Overtime pay
- A portion of welfare payments
- Allowances for underdeveloped and harsh-climate regions
- Non-mandatory teaching rights for educators
- Shift differential pay
will now be included in the calculations for pension deductions and, consequently, the final retirement benefits.
Tangible Benefits and Long-Term Stability
The government projects substantial positive outcomes from this structural shift.
- Increased Pensions: Minister Meydari announced that the pensions for current government employees are expected to see a significant rise of approximately 30 to 40 percent upon implementation.
- Stable Future Incomes: The reform ensures that the pensions of state retirees will not face a severe drop in the coming years, bringing greater transparency and sustainability to the public sector payment system.
- Strengthened Pension Funds: A key advantage of the bill is the enhancement of the financial capacity of the country’s pension funds, providing the government with relative relief from the issue of fund imbalances.
A Message of Dignity and Assurance
Highlighting the broader impact, Minister Meydari pointed to the social and psychological benefits of this decision. He stated that the bill sends a clear message of the government’s resolve to uphold the dignity of its human resources. Ensuring livelihood stability and confidence in the future of retirement is a crucial part of strengthening trust between employees and the country’s administrative system.
The bill, which had been dormant since 2013, was approved by the cabinet and will now be sent to the Islamic Consultative Assembly (Parliament) to complete the legislative process. Its implementation is also expected to increase coordination between different categories of employees and reduce the need for similar protective laws in the future, guaranteeing the long-term stability of the pension funds.