Iranian Government Approves Landmark Pension Reform to Boost Retiree Incomes
In a significant move to enhance the financial security of retirees, the Iranian government has officially approved a bill to reform pension calculations. The initiative, announced by the Head of the Administrative and Employment Affairs Organization, Aladdin Rafiezadeh, is designed to prevent a sharp drop in income for employees upon retirement and to strengthen the financial foundations of the country’s pension funds.
Closing the Pension Gap
The newly approved bill amends Article 106 of the National Civil Service Management Law. Its core provision is to expand the range of allowances that are subject to pension deductions. Previously, many supplementary payments received by active employees were excluded from these calculations, leading to a significant disparity between their working and retirement incomes.
What’s Newly Included?
Under the reformed legislation, several key allowances will now be factored into the pension base. These include:
- Allowances for working in underdeveloped and harsh-climate regions.
- Overtime pay.
- Non-mandatory teaching fees for teachers and university faculty.
- Shift differential pay.
- A portion of employee welfare payments.
A Dual Benefit: Fairness and Sustainability
Mr. Rafiezadeh emphasized that this reform serves a dual purpose. Primarily, it directly addresses the “considerable reduction” in earnings that individuals have faced upon retiring. By incorporating these additional payments into the pension calculation, the gap between the incomes of active workers and retirees will be narrowed.
Furthermore, the move is projected to create a more stable and sustainable revenue stream for the pension funds themselves. By broadening the contribution base, the funds are strengthened, ensuring their long-term ability to support retirees. The official also noted that this harmonization reduces the need for separate protective laws, creating a more streamlined and equitable system for all.