Title: New Pension Reform Aims to Stabilize Incomes and Bolster National Retirement Funds
In a significant move to secure the financial future of public servants and strengthen the country’s retirement systems, the Iranian government has approved a new bill that expands the pensionable income base for state employees.
Closing the Pension Gap
The bill, which amends Article 106 of the Civil Service Management Law, was approved by the cabinet on November 15. Its primary objective is to prevent a sharp decline in employees’ income upon retirement. Currently, various allowances and benefits—such as overtime pay, hardship pay for underdeveloped regions, and certain welfare payments—are not subject to pension deductions. This has led to a significant disparity between an employee’s final salary and their subsequent pension.
A Dual-Purpose Initiative
Alaeddin Rafiezadeh, a senior government official, announced that the reform is designed to address this issue directly. “The ratification of this bill will, in addition to reducing the income gap between active employees and pensioners, strengthen the sustainable resources of pension funds,” he stated.
By including these additional payments in the calculation for pension deductions, the reform ensures that retirees receive a pension that more accurately reflects their career earnings. Simultaneously, it creates a more robust and predictable stream of income for the national pension funds, securing their long-term stability.
Harmonization and Long-Term Stability
The official further emphasized that the legislation brings greater harmony between civil service law and labor law regulations concerning overtime. This harmonization reduces the need for separate protective laws and represents a strategic step toward ensuring the enduring health of Iran’s retirement infrastructure, guaranteeing continued support for all retired public servants.