Title: New Government Bill Aims to Boost Retirement Benefits and Pension Fund Stability
In a significant move to reform the pension system, the Iranian government has approved a new bill designed to enhance retirement benefits for public sector employees and strengthen the financial health of national pension funds.
Key Reforms and Objectives
Alaeddin Rafiezadeh, Head of the Administrative and Recruitment Organization, announced that the bill, approved by the cabinet on November 15, amends Article 106 of the Civil Service Management Law. The primary goals are twofold: to prevent a sharp decline in employees’ income after retirement and to improve the fiscal stability of the country’s pension funds.
The legislation expands the list of income items subject to pension deductions. Previously excluded items such as overtime pay, hardship allowances for underdeveloped regions, non-mandatory teaching fees for educators and faculty, shift differentials, and certain welfare benefits will now be included in the calculation of pension contributions.
Bridging the Income Gap
A central issue addressed by the bill is the significant gap between the final salary of an active employee and their initial pension. By incorporating a wider range of earnings into the pension base, the reform ensures that the calculated retirement pension is closer to what an employee earned while working. This measure is expected to substantially reduce the financial shock often experienced upon retirement.
Harmonization and Long-Term Stability
Officials emphasize that the bill also promotes greater harmonization between different groups of workers. Once ratified by the parliament, it will align the pension deduction rules for civil servants more closely with those for employees covered under the Labor Law, particularly concerning overtime payments.
This strategic reform is projected to lessen the need for future supplementary support laws and contribute significantly to the long-term sustainability of Iran’s pension system, securing a more stable financial future for retirees.