Title: New Pension Figures Announced: Key Details on Annual Payment Adjustments for Retirees
Article:
A significant update regarding the annual pension adjustment process for state retirees has been announced, outlining the calculation method for the upcoming fiscal year. The process, governed by the annual budget law, follows a specific formula distinct from other social security pensioners.
Understanding the Calculation Formula
The adjustment begins by applying a percentage increase to the retiree’s final salary decree from the previous year. For instance, if a retiree received 16 million Tomans monthly, applying a 20% increase would initially raise the figure to 19.2 million Tomans. However, this is not the final amount, as a crucial factor known as “harmonization” (hamsān-sāzi) is integrated into the calculations.
The Harmonization Process Continues
The harmonization process for state retirees is continuing this year and, in accordance with the law, will be implemented for the third consecutive year in the upcoming Iranian calendar year (1405). Based on the Seventh Development Plan law, during the first year of the plan’s execution, retirees’ pensions must increase by 20% relative to the salary of an equivalent active employee. This process is set to continue in subsequent years, aiming to bring retirees’ pensions to 90% of their active counterparts’ salaries by the third year.
Final Calculation Steps
After the customary annual increase is factored in, the pension is further calculated within the harmonization framework. This involves a multi-step calculation where the harmonization amount—equivalent to 90% of the active employee’s salary—is determined. Subsequently, this figure is multiplied by the second-phase increase percentage (20%), and finally, the new year’s increase coefficient is added to the formula.
In simpler terms, to determine the final pension, the previous year’s final decree amount is first combined with the seniority increase percentage. The result from the second-phase harmonization calculation and its related coefficient is then added to this sum to establish the retiree’s final adjusted pension. This structured process highlights that while the base increase is positive, precise calculation requires considering several factors and multiple procedural steps.
This announcement provides clarity on the government’s ongoing commitment to implementing planned pension adjustments in line with established development programs.