Iranian Government Approves Landmark Pension Reform to Enhance Retiree Benefits
In a significant move to bolster social welfare, the Iranian government has approved a pivotal amendment aimed at securing the financial future of its retirees and strengthening the nation’s pension funds.
Addressing the Income Gap
The newly approved amendment to Article 106 of the National Administration of Services Law is designed to tackle a key issue: the substantial drop in income that many employees face upon retirement. A primary cause of this reduction has been that various allowances and benefits were previously excluded from pension contribution calculations, leading to a lower baseline for retirement pay.
Expanding the Pension Contribution Base
Under this reform, a wider range of earnings will now be subject to pension deductions. This includes allowances for working in underdeveloped regions, overtime pay, non-mandatory teaching fees for educators and faculty members, shift differentials, and a portion of employee welfare payments. By incorporating these additional elements into the pension calculation base, retirees will see a more equitable and stable income that more closely reflects their final working years’ earnings.
Long-Term Stability for Pension Funds
Officials have emphasized that this measure is not only beneficial for retirees but is also a crucial step toward ensuring the long-term health and sustainability of Iran’s pension systems. By broadening the contribution base, the funds will receive more consistent and robust inflows of capital.
In a statement, Rafiezadeh, the Vice President, highlighted that the reform creates greater harmony between different categories of employees and reduces the need for additional, piecemeal supportive legislation. He affirmed that this action “guarantees the long-term stability of the pension funds,” marking a forward-looking policy for national social security.