Iran Implements Landmark Reforms to Strengthen Pension Fund Management and Protect Retirees
In a significant move to enhance governance and transparency, the Iranian government has enacted two major cabinet resolutions concerning the “qualification of managers” within the Civil Servants Pension Fund. Officials state these new regulations are a strategic step to safeguard the assets of the nation’s retirees through improved corporate oversight.
A Framework for Enhanced Oversight
Announced by Mohammad Hassan Bitarafpour, Director General of Corporate Supervision for the Pension Fund, the new bylaw is designed to systematize the fund’s affiliated companies, increase transparency, and boost managerial efficiency. The ultimate goal is the preservation of pensioner assets.
Bitarafpour emphasized the critical role of corporate leadership, stating, “The board of directors, as the executive arm and agent of the shareholders, is the trustee of company assets and, ultimately, the assets of our retirees.” He acknowledged that past challenges in the optimal selection and appointment of managers necessitated this structural reform.
Aligning with National Development Goals
The development of these new guidelines is a direct implementation of Articles 5 and 28 of Iran’s Seventh National Development Plan. This legislation mandated the Ministry of Economic Affairs and Finance, in cooperation with other relevant bodies, to formulate and secure cabinet approval for a comprehensive directive on the qualifications for CEOs and board members of companies affiliated with pension funds.
A Tiered and Merit-Based System
The newly enacted bylaw, approved by the cabinet after extensive expert review, introduces a tiered classification system for companies under the fund’s umbrella. Companies will be ranked into three levels—A, B, and C—based on criteria including asset value, operational income, number of subsidiaries, and economic significance.
Managerial requirements are directly tied to a company’s classification. For instance, CEOs of Level “A” companies must possess a minimum of three years of prior CEO experience, while one year suffices for Level “C” companies. Similar proportionate criteria have been set for both executive and non-executive board members.
A Transparent and Accountable Appointment Process
The selection of managers will be a rigorous, multi-stage process. Candidates will be evaluated based on three key indicators: professional experience, educational background, and scientific competence. Following a specialized interview, a final score will be determined.
To ensure fairness and impartiality, the final decision will be made by the Pension Fund’s Appointment Committee, which includes senior managers and two independent representatives from external institutions. An independent “Evaluation Committee” will operate objectively, scoring candidates based solely on documented records.
Enforcement and Continuous Performance Review
The bylaw includes strong enforcement mechanisms. Any individual found violating or failing to implement the new regulations will be barred from holding government positions for up to two years.
Furthermore, a continuous performance evaluation system for managers is already in place. The performance of company managers is assessed quarterly, semi-annually, and annually, with key metrics such as profitability, productivity, internal controls, and audit reports being closely monitored.
In his concluding remarks, Bitarafpour reaffirmed the core mission, stating, “The managers of subsidiary companies are trustees of our dear retirees’ assets. The precise implementation of these bylaws will lead to greater transparency, efficiency, and trust in the management of the Civil Servants Pension Fund’s economic enterprises.”