Title: Landmark Government Bill to Enhance Pension Security and Financial Justice for State Employees
In a significant move to reform the public sector compensation system, the Iranian government has approved a new bill designed to substantially increase the future pensions of state employees and ensure long-term financial stability.
A New Framework for Pension Calculations
The bill, an amendment to Article 106 of the National Civil Service Management Law, was passed by the cabinet and is now set to be presented to the Islamic Consultative Assembly for final ratification. According to Ahmad Meydari, the Minister of Cooperatives, Labour, and Social Welfare, the primary goal is to prevent a sharp decline in employees’ income after retirement. This initiative is framed as a major step towards creating a more transparent, stable, and equitable payment and pension system.
Key Changes and Financial Impact
The core of the reform involves a fundamental change in how pensions are calculated. Previously excluded items such as overtime pay, certain welfare benefits, hardship allowances for underdeveloped regions, and non-mandatory teaching allowances will now be included in the base used to determine retirement benefits.
Minister Meydari announced that this structural change will result in a significant 30 to 40 percent increase in the pension benefits for current government employees upon their retirement. This adjustment is intended to align retirement income more closely with an employee’s actual earnings during their career.
Strategic Goals and National Benefits
The legislation is grounded in the country’s overarching social security policies, which aim to eliminate unjust discrimination, create a comprehensive and efficient social security system, and establish uniform rules for all pension fund members.
Beyond the direct benefit to employees, the bill is projected to enhance the financial capacity of the national pension funds. This provides the government with greater fiscal stability by addressing long-standing imbalances within these funds and reducing the need for similar supportive legislation in the future.
Strengthening Trust and Social Cohesion
Minister Meydari also highlighted the profound social and psychological impact of this decision on the workforce. He stated that the bill sends a clear message of the government’s determination to uphold the dignity of its human resources. Ensuring livelihood stability and confidence in the future of retirement is a crucial component in strengthening trust between employees and the national administrative system.