Title: Landmark Pension Reform Approved by Iranian Government to Boost Retiree Incomes
In a significant move to secure the financial future of civil servants, the Iranian government has approved a pivotal reform to the country’s pension system. The amendment, passed on November 15, targets a long-standing issue: the sharp drop in income that employees face upon retirement.
Addressing the Income Gap
The core of the new legislation is a reform to Article 106 of the National Civil Service Management Law. Announced by Alaeddin Rafizadeh, a senior government official, the measure is designed to prevent a substantial reduction in the post-retirement earnings of state employees.
Currently, many payments received during employment—such as overtime and various welfare benefits—are not subject to pension deductions. While this boosts take-home pay for active workers, it results in a dramatically lower pension, creating a significant financial gap between a worker’s active and retired life.
Strengthening Pension Fund Stability
Beyond directly benefiting future retirees, the reform is a strategic step to fortify the nation’s pension funds. By broadening the contribution base to include these additional payments, the funds will receive a more stable and robust inflow of resources.
“This legislation, besides reducing the income disparity between active staff and retirees, strengthens the sustainable resources of pension funds,” Rafizadeh stated.
A Step Towards Long-Term Cohesion
The official, who also serves as a Vice President, emphasized that the amendment promotes greater harmonization between civil service law employees and those under the labor law. This alignment reduces the need for parallel supportive regulations and is projected to ensure the long-term stability and health of the pension system. The proposal now awaits final ratification by the Islamic Consultative Assembly (Majlis) to become law.