Title: New Government Initiative Aims to Strengthen Pension System and Retiree Benefits
In a significant move to bolster the national social security framework, the Iranian government has approved a new bill designed to reform pension calculations and enhance the financial stability of the country’s retirement funds.
Key Reform Approved
The bill, which amends Article 106 of the National Civil Service Management Law, was formally approved by the cabinet on November 15. The announcement was made by Aladdin Rafiezadeh, a senior government official, who outlined the core objectives of the legislative change.
Addressing the Income Gap
A primary goal of the initiative is to address the substantial drop in income that many employees experience upon retirement. Currently, various payments received during employment—such as overtime and certain welfare benefits—are not subject to pension fund deductions. This has led to a significant disparity between the final salary and the initial pension amount. The new bill aims to narrow this gap, ensuring a smoother financial transition for retirees.
Strengthening Pension Fund Solvency
Beyond providing immediate relief to retirees, the reform is positioned as a crucial step for the long-term health of the pension system. By broadening the contribution base to include previously exempted payments, the bill is expected to create a more sustainable and robust source of revenue for the pension funds. This proactive measure is intended to secure the funds’ ability to meet their future obligations.
Legislative Coordination and Future Outlook
Rafiezadeh further emphasized that the bill, once ratified by the Islamic Consultative Assembly (Majlis), will harmonize the pension deduction rules for civil servants with those already in effect for employees under the Labor Law. This alignment is expected to reduce the need for future piecemeal supportive legislation and represents a consolidated effort to ensure the enduring stability of Iran’s retirement security system.