Iran Economy NewsIran’s Bankrupted Pension Funds

Iran’s Bankrupted Pension Funds

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Four of the Iran regime’s pension funds are currently unable to pay their retirees’ salaries and benefits from internal sources and are provided with annual assistance budget laws. The plunder of the pension funds by the regime has a long story that seems to have no end.

For many years, the regime’s economist experts, have warned of an impending pension fund crisis. Now, as economic challenges widen, these problems are becoming more pronounced.

According to state media, except for a limited number of pension funds, 18 often face multiple funding bottlenecks, and specifically, four funds can longer pay their pensions.

According to reports published by the Ministry of Cooperatives, Labor, and Social Welfare, there are 18 pension funds in Iran, which cover a total of about 23,600,000 million pensioners.

These reports say that the number of credits received by the funds from the budget reached 2,170 trillion rials in 2022, with the lion’s share allocated to the state, military, and steel pension funds.

Meanwhile, separate credits are currently allocated to bankrupt funds such as the Radio and Television Employees Fund and the Homa Employees Retirement Fund. The status of the support ratio in the 18 pension funds shows that only the two lawyers’ funds, the villagers’ and nomads’ funds have a support ratio of more than five, and this ratio is less than 5 in the other funds.

The support ratio for the Social Security Administration, whose retirees have been holding large gatherings for some time in protest of the decision to increase the pension by 10 percent, is 4.4.

Some pension funds have also taken out loans from banks in recent years to pay the pensions of their retirees. One of these funds, which has been managed in this way in recent years, is the Tehran Municipality Pension Fund.

The financial deficit of pension funds has become a huge crisis, intensified every year by the increase of the population covered by them and the continuation of financing crises caused by the regime’s corruption and its overboard investments in its proxy forces.

The latest and strange regime strategy to reduce the pressure on these funds is to try to increase the retirement age. At the end of 2021, the regime raised the retirement age by two years during the drafting of the 2022 budget bill, in the hope of postponing the crisis for a while.

However, the aforesaid proposal was rejected by the Social Commission of the Parliament due to the regime’s fears of widespread protests, while the regime claimed that it was considering the people’s rights.

In the past, the Ministry of Cooperatives, Labor, and Social Welfare announced a deficit of pension funds of about 2,000 trillion rials and predicted that this deficit would reach more than 8,000 trillion rials in 2024.

Also, according to statistics released by the regime, more than 70 percent of state pension funds depend on the government budget. The Armed Forces Fund is 100 percent dependent on the government budget.

The Social Security Organization, as one of the largest pension funds, that is covering the largest population funds, has always faced a shortage of resources.

For these reasons, we have witnessed nationwide protests by the country’s retirees, while most of them live on the brink and below the poverty line with a monthly income of fewer than 20 million rials, or $62.5 according to the official exchange rate.

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