The early retirement proposal approved by Majlis Social Commission would pauperize government employees and undermine pension funds, says Saeed Leylaz, a university professor and economic analyst.
Last month, 39 members of the Iranian Parliament submitted the early retirement proposal to the Majlis Presiding Board, based on which the age requirement for retirement benefits would be eliminated and men with 25 years of work and women with 20 years of work would become eligible for full retirement benefits.
“The main goal of the proposal, as lawmakers behind the proposal argue, is to create jobs for three to five million jobless university graduates, which is far from being practical,” Leylaz was quoted as saying by the Persian daily Shargh.
“This misinformed, emotionally-motivated proposal is highly unlikely to get the parliament’s green light. Even if it is passed by the parliament, the Guardians Council [an oversight body that ensures laws are in line with the Iranian Constitution and Sharia] will reject it because it runs against Article 75 of the Iranian Constitution.”
Article 75 of Iran’s Constitution states, “Members’ bills and proposals and amendments to governments bills proposed by members that entail the reduction of public income or increase public expenditure may be introduced in the assembly [Iranian Parliament] only if the means for compensating the decline in income or meeting the new expenditure are also specified.”
Leylaz said the retirement age is on the rise all over the world to reduce the government’s financial burden.
“Under the circumstances, such a proposal by lawmakers would put more pressure on social security and on pension funds that are already grappling with deficits,” he said.
“In recent decades, the return on investment in Iranian pension funds has been very low, even less than the inflation rate due to mismanagement and corruption. Population aging and the high number of arrivals to the labor market over those who depart have also weakened pension funds.”
Asghar Ahaniha, a member of Iran Chamber of Commerce, Industries, Mines and Agriculture, said the parliament’s proposal is technically and scientifically unrealistic, as it will only give rise to mounting costs.
He underlined the importance of improving the productivity of workforce instead of drafting proposals that only pose new challenges to employment and called on the parliament to reform its approach in this regard.
“The government’s overdue debts to the Social Security Organization are enormous; SSO won’t be financially accountable to its members,” Ahanian was quoted as saying by Otaghiranonline.ir, the chamber’s news portal.
Albert Boghzian, an economist and a professor at the University of Tehran, said that on the face of it, the early retirement proposal seems like a good proposal but its ratification and implementation would be akin to jumping out of the frying pan into the fire.
“Among its dangerous consequences would be worsening unemployment, making workers risk losing their jobs and throttling the dying pension funds,” he said.
SSO is Iran's biggest social insurance company that provides coverage to salaried workers and self-employed persons.
