The government has approved a proposal to repay its debt worth 320 trillion rials ($1.48 billion) to the Social Security Organization by transferring shares to the organization, the minister of cooperatives, labor and social welfare said.
Mohammad Shariatmadari said the government will transfer a portion of its shares in nine state-owned companies, IRNA reported.
The SSO is the biggest insurance company that offers insurance cover to non-state workers as well as voluntary coverage to the self-employed.
The minster did not provide details nor say which companies will be involved. However, inquiries by ILNA show the Iranian Tobacco Company is one of the companies.
Iranian Tobacco Company was established in 1937 and was fully owned by the government until 2013 when part of its shares were sold to the Iran Steel Pension Fund.
The oldest tobacco company in Iran has 81 production lines and is capable of producing 40 billion cigarettes annually or 50% of the market demand.
According to ILNA, other companies in the list are South Aluminum Corporation (SALCO), Damavand Petrochemical Company, Heavy Equipment Production Company (HEPCO), Iran Tourism Development Corporation, Imam Khomeini Oil Refining Company of Shazand, Jajarm Alumina Plant, Zarshouran Gold Mines, the Mining Industries Development Company and Machine Sazi Tabriz Group.
Shariatmadari hoped that the move will help the SSO secure new financial resources to meet its financial commitments. The government now owes billions to the organization that has almost 40 million people under its umbrella.
Hit Hard by Coronavirus
Iran’s largest pension fund has been hit hard by coronavirus pandemic because a majority of its members work in coronavirus-hit industries, service sectors and guilds, according to Hojjat Mirzae, a deputy labor minster.
As per law, the SSO has to also reimburse hospitals and healthcare providers for treatment costs related to the virus that is destroying lives, jobs and the economy.
The army of unemployed as a result of massive layoffs and lockdowns has become an extra burden for the SSO, which was already under immense pressure before Covid-19 struck.
“Close to 851,864 people filed for unemployment benefits from February 29 to June 20. From this number, 711,800 were found eligible for the dole,” IRNA quoted Masoud Babaie, an official with the Labor Ministry as saying.
With 151,724 applications, Tehran registered the highest number of unemployed, and North Khorasan the lowest with 4,391 jobless.
The rising number of retirees and declining revenue from its investments are making a bad situation worse for the giant organization. In recent years the SSO has been forced to sell its assets to remain afloat and pay the rising number of retirees.
SSO borrows between 7-10 trillion rials a month from banks to cover its costs, said Akbar Showkat, a member of the SSO board of trustees.
“Banks say they won’t lend us anymore and we have to sell our assets to cover costs,” the YJC quoted him as saying.
In April the SSO sold 10% of its stakes in the Social Security Investment Company, its own investment wing known as Shasta, in an initial public offering. Shasta later generated 69 trillion rials ($320 million) from its first IPO.
