Evaluation of the Sustainability of the Pension System: A Case Study on Iranian Social Security Organization

Iran’s social insurance system including 18 pension funds, which are part of the social protection system, covers about 68% of the working population and about 46% of the elderly population. Today, since the country’s pension funds are one of the main players in the social and economic spheres of the country. Failure to adopt appropriate strategies for managing this crisis will pose very serious risks to the sustainability of the country’s economic, social, and political dimensions. However, what has become a major concern for policy makers in the field of social security is the worrying situation of pension funds, which has reached the level of concern and warning with the sustainability and has even crossed this border in some of these funds. With the aim of sustainability, this study examines the financial status of the Social Security Organization.

This study uses cohort methodology and demographic and economic data were used to estimate the financial capacity of the Social Security Organization.

The most important economic challenge of the Social Security Organization is known as the generous pension formula including low retirement age as well as non-payment of government share of contribution.

The reform proposals should be in the form of a pension formula adjustment through increasing the period of insurance and age of retirement as well as planning for the unpaid government share of contribution to be paid regularly.