The severance pay has become a secluded courtyard for the children of high-ranking Iranian government officials, known to Iranians as ‘Agazadeh’. Together with the regime’s corrupt machinery, they have steered it into dangerous territory.
Iran’s retirement crisis is an ongoing problem that many experts believe will become the biggest economic challenge for the Iranian regime in the near future. Recently, the crisis once again made the headlines in Iranian state media, and Sajad Padam, head of the Social Security and Insurance Department of the Ministry of Health, has become a shadow of the regime in this chaotic situation. In a bizarre statement, he announced the sale of Kish and Qeshm islands, as well as Khuzestan province, to deal with the retirement crisis. Padham claimed his remarks were taken out of his context, but he was dismissed nonetheless.
This is not the first time Iran’s retirement crisis has been addressed. The history, or perhaps media coverage, of this crisis goes back to the Hassan Rouhani government and Ali Rabiei, who served as Minister of Cooperatives, Labor and Social Welfare in that government.
In 2018, then Deputy Social Welfare Minister Ahmad Meidari said the government’s debt to these funds would amount to 1,700 trillion rials (about $16.19 billion at the time). “If we don’t come up with a retirement solution, we will face a crisis situation in the near future,” Maydali said.
Although this crisis appears to be an economic challenge, it remains highly sensitive and closely related to security issues. News and remarks by officials and experts about this economic dilemma show just how serious this catastrophe is before Tehran’s rulers.
Mr. Labiey has warned about this issue many times. In 2016, he raised corruption charges against these funds, questioning their profitability.
The retirement crisis in Iran is an ongoing problem that has not been adequately addressed. This challenge has significant economic and security implications.
At a public meeting of the government’s Majlis (parliament) in January, current Labor Minister Sowat Mortazavi acknowledged that there is a serious crisis in Iran’s social security system. He warned that by 2026, both the Social Security Fund and the National Pension Fund would run out of resources if the administration continued with its current policies.
Economist Massoud Niri, who is close to the Iranian regime, recently pointed out that the lack of administrative and political independence of these funds is a big problem. When governments face budget deficits, they turn to pension funds for support, creating debt that threatens the stability of the funds.
Retirement is on the verge of bankruptcy
According to the latest statistics, the social security scheme, which covers about 15.5 million workers with insurance, pays pensions to about 4.3 million retirees each year. The National Pension Fund is the second largest pension fund in Iran, covering approximately 880,000 insured persons and providing pensions to 1.63 million retirees. The imbalance between pensioners and contributors, coupled with corruption and mismanagement put pension funds at serious risk of bankruptcy.
Moreover, corruption is widespread within these funds in Iran. Funding is increasingly dependent on government resources and the general budget. These pension funds were supposed to be financially independent and have their own policies, but they have become some of the government’s biggest financial relies. The hasty and inappropriate privatization of some companies, their transfer to pension funds in exchange for government debt, and the appointment of unqualified managers with ties to certain elites pose serious problems for the funds. The former CEO of the Steel Pension Fund in the country said that the fund involved celebrities, children of former ministers and elites, and that the fund had 800 cases and 100 trillion rials (approximately 192 million yen) due to mismanagement. Millions of dollars worth of lawsuits amassed.
The problem of pension fund corruption is not limited to Iran’s appointment of certain individuals, but also includes exorbitant salaries and bonuses. Sowat Mortazavi said in an interview that some individuals in the pension fund receive a monthly salary of 200 million rials ($400), plus monthly gifts of 500 million to 1 billion rials ($1000 to $2000). rice field.
The roots of the Iranian pension fund crisis cannot be solved simply by changing officials. This challenge poses a serious threat to the regime’s security. The corrupt structures, weak management structures and mounting debts of these funds are not easily resolved. Pension funds have become a safe haven for some elites and have reached a crisis point that requires urgent action.
Meanwhile, we find that pensioners across Iran are protesting daily for their rights.
Protests continue in Iran as the country’s economy continues to suffer further crises as a result of the destructive policies of the mullahs and others. In particular, the depreciation of the rial against the US dollar has made it extremely difficult to make ends meet, and an increasing number of retirees are heading out onto the streets.
Administration officials have refrained from answering pensioners’ demands. Protesters complain that their meager pensions are barely enough to cover the most basic costs of living, often months behind in payments.
Pensions and salaries have not adapted to this fundamental change in the economic dynamics of Iranian society. At current interest rates, most pensioners are living below the regime’s own poverty line.