By Alireza Ramezani for Al-Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iran Business News.
On Jan. 15, Iranian lawmakers approved a new law that would oblige state-run and public organizations to accept early retirement requests of female employees who have worked at least 20 years, without pushing any age limit.
At present, the age limit for early retirement of women covered by the Social Security Organization (SSO) is 52. The law needs to be approved by the constitutional watchdog, the Guardian Council, before going into effect.
The legislation, which is part of the sixth Five-Year Economic Development Plan (March 2017-March 2022), has prompted a swift outcry by pension authorities. Given that most pension funds rely heavily on government resources to meet their obligations, officials have complained that the move would impose a heavy financial burden on not only struggling pension funds but also the state budget.
In August 2016, First Vice President Eshaq Jahangiri had revealed that the administration covers 70% of pension costs, while some funds, such as the Armed Forces Social Security Organization, are fully state funded.
A day after the controversial Jan. 15 vote, Deputy Minister of Cooperatives, Labor and Social Welfare Hojjatollah Mirzaei called on the Guardian Council to stop the “naive” decision, warning that it will affect 150,000 employees within an immediate time frame.
He further warned that the legislation will impose a financial burden of about 100 trillion rials ($3.08 billion) on the Civil Servants Retirement Organization (CSRO), the country’s second-largest fund, if it goes into effect.
Indeed, the law could deprive the CSRO from pension premiums payable by 530,000 female employees over at least a decade, given that these employees have only worked 18.5 years on average, according to member of parliament Kamaloddin Pirmoazzen, as reported by the Aftab News website. Of note, the CSRO is barely able to meet 20% of its financial obligations at present, with the rest coming from the state.