Title: Landmark Reform Approved: Pension Increase and Enhanced Stability for Retirees
In a significant move to bolster the financial security of retirees, the Iranian government has approved a pivotal amendment aimed at increasing pensions and reinforcing the long-term stability of pension funds.
Government Approves Key Pension Reform
On November 15th, the Iranian government ratified an amendment to Article 106 of the National Civil Service Management Law. This legislative action is strategically designed to address the income disparity that has existed between active employees and retirees, marking a proactive step in social welfare policy.
Understanding the Legislative Framework
The core of this reform lies in the recalibration of pension contribution calculations. Previously, the basis for these deductions was the fixed salary plus certain continuous allowances. The new amendment ensures a more comprehensive and realistic calculation, which is expected to directly result in higher pension payouts for retirees.
A crucial provision of the amendment addresses past contributions. For public sector employees covered by the Social Security Organization who had non-continuous benefits excluded from pension deductions prior to this law, the path is now cleared. These individuals are entitled to claim the full amount of both their and their employer’s contributions from the Social Security Organization. Furthermore, these amounts can be integrated into their ongoing pension benefits if they so choose.
Addressing a Long-Standing Challenge
A primary issue this reform tackles is the previous exclusion of various payments—such as overtime and welfare benefits—from pension deduction calculations during an employee’s service years. This often led to a significant and unexpected reduction in income upon retirement. The newly approved amendment is set to correct this imbalance, fostering greater income parity between current workers and retirees.
Ensuring Stability and Coordination
Officials have highlighted the wide-ranging positive impacts of this legislation. Refi’zadeh, the Vice President, stated that the amendment will create greater coordination between different categories of employees concerning the inclusion of overtime in pension calculations. He further emphasized that the reform “will reduce the need for similar supportive laws in the future and guarantees the long-term stability of pension funds,” underscoring the government’s commitment to sustainable social security systems.