The government will repay its 890 trillion rials ($3.4 billion) debt to the Social Security Organization by transferring shares to the organization, managing director of the SSO said.
Mirhashem Mousavi said the transfer would be in the framework of the 2021-22 budget law and be completed before the yearend on March 19, the semi-official Fars News Agency reported.
The SSO is the biggest insurance company that offers insurance cover to non-state workers plus voluntary coverage to the self-employed.
Mousavi estimated government debt to be in the region of 3,000 trillion rials ($11.3b). As per the provisions of the 2022-23 budget bill, the Raisi administration should settle pay 900 trillion rials ($3.3b) next year.
Arrears to the SSO keep on rising due to the inability of successive governments to pay their share of insurance premium of workers and other unmet financial obligations under the law.
“The government has undertaken to pay the employers’ share for special insurance coverage, namely for women who are breadwinners, drivers, carpet weavers and constructions workers,” the
SSO chief said.
As a non-government organization, the SSO is largely funded by insurance premium contributions (7% by employees, 20-23% by the employer and 3% by the government). Governments in the past never paid their full share. An estimated 50 million Iranians, out of the total 85 million population, are under SSO cover.
According to Mousavi, Shazand Petrochemical Company and Lule Gostar Esfarayen are the two main government-owned companies to be sold the SSO.
“The government’s combined stake in the two companies is expected to clear 270 trillion rials [$1b] of the arrears.”
Over the years the organization has often acquired government assets to swap debts. SSO owns several major industries and companies and has emerged as an economic conglomerate.
Its investment arm, the Social Security Investment Company (known by its Persian acronym Shasta) is said to be the richest and highly influential company in Iran.
24 Subsidiaries Planned to Go Public
Ali Rostami, managing director of Shasta said it plans to list 24 subsidiaries within two years.
“At present, 14 companies are in the process of listing in the Securities and Exchange Organization,” he said, pointing to plans to merge 19 other small subsidiaries to improve efficiency.
Rostami added that Shasta normally secures between 7%-8% of the SSO resources, recalling that this may vary due to unforeseen expenses, namely rise in pension payments.
In recent years the SSO has been forced to sell some of its assets to remain afloat and pay the army of retirees whose numbers have grown regularly.
In April 2020, the SSO sold 10% of its stake in the Social Security Investment Company, its own investment arm in an initial public offering.
Shasta generated 69 trillion rials ($260 million) from the IPO. The company later sold more shares in the secondary market when the stock market was at its nadir from March to Sept. 2022.
The multidisciplinary company has shares in a wide range of sectors, including petroleum, petrochemicals, pharmaceuticals, cement, transportation, telecom, shipping and finance companies that manage 187 subsidiaries.
