On May 1, Sajad Padam, the head of Iran’s Social Security Organization, acknowledged another aspect of the country’s economic crunch and the regime’s role in creating it.
“We will reach a point soon to sell Qeshm and Kish Islands to pay retirees’ pensions. We are in such a critical situation that if we sell three million barrels of oil daily and earn its full revenue by evading sanctions, we cannot solve the retirees’ problems,” he said.
His acknowledgments caused much stir in the regime and further angered Iranian pensioners and workers who have been protesting their deplorable situation and meager pensions. Fearing a public backlash, the regime’s president Ebrahim Raisi fired Padam. While leaving office, he said, “I am leaving, but you have sacrificed clarity and honesty since you don’t like it.”
Of course, Padam’s revelations were part of the regime’s increasing infightings over more share of power. Nevertheless, his admission further elucidated the ruling kleptocracy’s role in devastating Iran’s economy.
In a May 4 article titled “Padam is gone, but a time bomb is still there,” the state-run Etemad newspaper wrote: “Padam only repeated the reality and problem that economists and other experts have been warning about. The pension funds’ future is bleak. Yet, the government couldn’t accept the reality from one of its appointed managers.”
Iran’s Social Security Organization (SHASTA) has been bankrupt for years. Shasta is a holding company that oversees 187 companies spanning diverse sectors such as oil, gas, petrochemicals, medicine, cement, ceramic tiles, electricity, energy, banking, insurance, land, and sea transport, agriculture, and food.
Although owned by workers and retirees, its CEO and board of directors are appointed by the Minister of Cooperatives, Labor, and Social Welfare, leaving the true owners without a managing role. While not a government entity, Shasta is public property and went private under Hassan Rouhani’s order, with shares sold on Tehran’s Stock Exchange. Unable to pay its debt to the Social Security Administration, Rouhani’s government started selling Shasta’s shares. This ultimately resulted in the bankruptcy of some pension funds, leaving workers and retirees in a difficult financial position.
The ruling theocracy’s rapacious need for funds to fuel its illicit activities both at home and abroad has led to the egregious plunder of workers’ and retirees’ hard-earned money. The crisis facing Iran’s pension funds is not a recent phenomenon but rather a longstanding issue. Established in the early 1900s after Iran’s Constitutional Revolution, the pension fund was designed with the primary objective of securing retirees’ pensions.
Retirees and Social Security Pensioners Rally in Tehran, Tabriz, Isfahan, Rasht, Khorramabad, Kermanshah, Qazvin, and Ahvaz#Iran #IranProtests https://t.co/JKD0JcGsjz pic.twitter.com/GT0wxzqXPO
— NCRI-FAC (@iran_policy) January 17, 2022
The pension fund’s mechanism mandates that every salaried worker contributes a percentage of their monthly income to the pension fund, thus ensuring a steady income in their post-retirement years. Under the law, no individual or institution may withdraw funds from this account except to disburse pensions to retirees.
Due to the substantial amount of money amassed in these pension funds, both Pahlavi’s autocratic regime and the present ruling theocracy have egregiously pillaged retirees’ funds.
The ruling kleptocracy has escalated their looting of pension funds to an unprecedented level in recent years. Despite the poverty line ranging from 180 to 320 million rials, the regime disburses a meager 68 million rials to pensioners.
In recent years, Iranian pensioners have held weekly rallies, protesting their deplorable conditions. In their protests, they have underlined that the regime’s institutionalized corruption has affected the financial situation of Iranians by chanting: “Our hands are empty, but you are in a good situation,” and “Plunderers, shame on you, leave our country.”
In November 2022, Raisi dismissed the manager of the pension fund in fear of potential protests. However, five months later, his Minister of Cooperatives, Labor, and Social Welfare, Solat Mortazavi, admitted that the dismissal of managers alone would not suffice in addressing the predicament pensioners face.
Thousands of Iranian workers, pensioners, and retirees supposed to be covered by Shasta hold daily protests across Iran, demanding to receive adequate salaries and pensions and be fully insured. #IranProtests https://t.co/wvvrvYqsbm
— NCRI-FAC (@iran_policy) July 20, 2022
“The national pension fund is facing 75% dissatisfaction. In 1404 (2025-2026), our dispute will reach 80 quadrillion rials in funds affiliated with the Ministry of Labor Cooperation and Social Welfare,” he said on April 22.
The Iranian regime’s deep-seated corruption has rendered it impotent in resolving the country’s economic crises. To ameliorate the pensioners’ plight, authorities must first tackle the pervasive corruption within the regime. However, this is unlikely to happen as the regime is entrenched in corruption, and such action would be akin to shooting the system in the leg.
So as the state-run Etemad daily wrote, “The pensions funds’ crisis, like other social and economic problems, is like a timing bomb. It should be defused soon, or it will have devastating consequences.”
