Rewritten Title:
Policy Shift Aims to Bridge Pension Gap and Stabilize Public Sector Pay
Article Content:
A Move Towards Greater Pension Equity
In a significant policy development, senior Iranian officials have outlined a government initiative aimed at reforming public sector compensation to ensure long-term pension stability. The proposed changes focus on standardizing deductions from state employees’ total earnings to create a more sustainable and equitable retirement system.
Addressing a Structural Imbalance
According to Mr. Rafiezadeh, the head of the country’s Administrative and Recruitment Organization, a state employee’s income currently comprises two parts: the base salary and a package of benefits and overtime pay, which typically constitutes 40 to 50 percent of the total. He explained that this second portion has not been subject to standard deductions. The proposed reform would correct this, making the entire income subject to a unified deduction system.
“This matter will be a very significant help to retirees’ pensions,” Rafiezadeh stated, emphasizing that this structural shift is being pursued by the government to increase public servants’ salaries in a sustainable manner.
Legislative Framework for Fairness
The Minister of Cooperatives, Labour, and Social Welfare recently elaborated on the legal basis for this change. The initiative is part of a bill to amend Article (106) of the Civil Service Management Law. The minister stated that this amendment is aligned with overarching social security policies designed to eliminate unjust discrimination, create a comprehensive and efficient social security system, unify procedures for pension fund members, and establish fairness by standardizing insurance rules and regulations.
This structural evolution, officials argue, will prevent a sharp decline in the pensions of future state retirees and bring greater transparency and stability to the public sector payment system.
Impact on Future Pensions
The practical effect of implementing this bill would be substantial. The Labour Minister projected that the pensions of current government employees would see an increase of approximately 30 to 40 percent upon retirement, as their pensions would be calculated based on a more accurate representation of their total career earnings.
Explaining the Current Disparity
Amir Rahbar, a civil pension fund activist, clarified the existing issue. He noted that because a large portion of an active employee’s income has been exempt from deductions, it has consequently not been factored into their future pension calculations.
“The translation of this talk is that over the past 30 years, governments have paid active employees with inflated figures, without the corresponding deductions relative to retirees,” Rahbar said. “This has caused income to be suddenly halved on the day of retirement.”
He explained that an employee might be content with their total earnings during their career, but upon retirement, they discover that up to 50 percent of that income “no longer exists” in their pension calculation. When half of an active employee’s pay is delivered through non-deductible channels, the retiree has no claim to it in their pension.
The Road Ahead
The proposed legislative change is presented as a corrective measure to this long-standing structural gap. By ensuring that all components of an employee’s income are included in the deduction base, the government aims to create a more direct and transparent link between career earnings and retirement benefits, thereby securing a more stable financial future for its public servants.