Title: Landmark Pension Reform Aims to Secure Financial Future for Retirees and Stabilize National Funds
In a significant move to bolster the long-term stability of the country’s pension system and protect the incomes of future retirees, the Iranian government has approved a pivotal amendment to the State Services Management Law.
Closing the Gap: A New Approach to Pension Calculations
The newly approved bill, passed by the cabinet on November 15, mandates that a broader range of employment benefits will now be subject to pension fund deductions. This strategic change is designed to address a critical issue: the sharp drop in income many experience upon retirement.
According to Alaeddin Rafizadeh, a senior government official, the reform will include allowances for underdeveloped regions, overtime pay, non-mandatory teaching fees for educators and faculty members, shift differentials, and a portion of employee welfare payments in the pension calculation base. Previously, these substantial payments were excluded, leading to a significant disparity between an employee’s final salary and their subsequent pension.
Dual Benefits: Strengthening Retirees and National Funds
Mr. Rafizadeh emphasized that the initiative serves a dual purpose. “The bill to amend Article (106) was developed with the aim of preventing a significant reduction in employee income at the time of retirement and strengthening the resources of pension funds,” he stated.
He further explained that the reform will not only narrow the income gap between active workers and retirees but also create a more sustainable and robust financial foundation for the national pension funds. This forward-looking policy is seen as a crucial step in ensuring the system’s health for future generations.
Legislative Harmony and Long-Term Stability
The official also highlighted that the amendment promotes greater legislative consistency. By aligning the pension deduction rules for state employees with those already in place for workers under the Labor Law, the need for parallel protective legislation is reduced.
“This is an action that guarantees the long-term stability of pension funds,” Rafizadeh affirmed. The bill now awaits final ratification by the Islamic Consultative Assembly (Majlis), where its passage is anticipated to mark a major advancement in the nation’s social welfare planning.