Retirement: A Promise Under Erosion

On a payslip, the insurance premium is one line among several, yet in the lives of employees it carries a meaning beyond a deducted sum.

According to Ambassador Arjan's report, Aghaz newspaper wrote: On the pay slip, the insurance premium is one row among several other rows; But in the life of employees, it means more than a deducted amount. This money is paid with the hope of days when the ability to work is reduced and living expenses and treatment are still standing. Workers, employees and teachers pay a part of their income for years so that they do not lose their security of livelihood after retirement. The warning about the mismatch of funds has now turned this hope into a question: How will the resources received today support the rights and services of tomorrow?

Knower: Retirement is an obligation that establishes a link between payment today and receipt in the future. The insurance payer expects to receive the prescribed pension and services after fulfilling his legal obligations. For him, the fund is an institution that should reduce part of the worry of old age; An institution whose credibility is measured by the continuity of payments and the quality of support. Managing such an undertaking requires a horizon beyond a year's budget. The fund must pay the salaries of the current retirees and maintain the ability to fulfill the obligations of the next generations. Paying on time is essential today, but it alone does not prove financial health. The main question is what sustainable resources are behind this payment and how the future obligations are calculated.

The word "bankruptcy" in the discussion of pension funds causes great concern; Especially for those whose pension is the main income of their life. However, deficit of resources, dependence on government aid and legal bankruptcy are not the same concepts. The situation of the funds is also different and cannot be described with the same sentence. The risk becomes serious when sustainable revenues do not meet obligations and deficit compensation becomes dependent on increased support or consumption of assets. Budgetary assistance may ensure continued payment, but if the factors causing the deficit are not corrected, the issue will be carried over to the next year. Selling assets for current expenses can also limit future income. In this situation, the continuation of the fund's activity does not necessarily mean that the instability will be resolved.

old age; Funds readiness test

Increasing life expectancy is a human achievement, but the pension system must be prepared to pay pensions over longer periods. At the same time, changing the composition of the population can reduce the ratio of insurance payers to pensioners; A ratio that is one of the important indicators of fund evaluation. As the number of pension recipients increases compared to the number of payers, the pressure on resources increases. Of course, sustainability assessment is not limited to this index; Actual return on investment, cash flow and value of future obligations are also important. The fund may have significant assets, but face a lack of liquidity to meet monthly obligations. Knowing these differences is necessary to make decisions before the crisis escalates. The labor market is also part of this equation. Formal employment and continuity of insurance will strengthen resources. On the other hand, evasion of insurance and employees not being covered reduces the financing capacity. Therefore, the future of retirement depends on the quality of employment today.

Increasing the retirement age is one of the solutions to reduce financial pressure; With the logic that the insurance payment period will be longer and the start of receiving the pension will be delayed. But factors such as the high population of people close to retirement, the rules of hard and unprofitable jobs, the increase in pension due to more experience and the costs independent of the retirement age are effective in limiting the effect of this policy. Increasing the number of insurance payers, reducing insurance evasion and expanding employment are among its suggested complementary measures. In a report on ways to improve the stability of the funds, the Majlis Research Center has raised the necessity of simultaneously examining reform policies and observing social considerations.

Part of the financial pressure of the funds is related to obligations that the necessary resources for their implementation have not been foreseen or provided. The support decision, however necessary, must have a clear financial support; Otherwise, it increases the gap between income and expenses. In the evaluations about the crisis of the funds, the implementation of laws without providing financial resources has been introduced as one of the main factors of instability. Accumulation of debts also limits the possibility of investment and earning. For the insurance payer, the difference between the devices regarding the responsibility of these costs is not a sufficient answer. He has paid his share and expects the responsibility of accepted obligations to be clear.

Aladdin Azouji, the CEO of the National Pension Fund, said in this regard: It is not possible to manage the increasing costs of the fund with the traditional methods of the past. Emphasizing the necessity of creating sustainable resources, he explained that the profit of the economic groups related to the fund is not even equal to half of the cost of one month's pensioners' salary. Azoji has also considered the fund's current economic capacity to be insufficient to create stable security in the payment of salaries and to cover the cost of supplementary insurance. This assessment reveals the gap between having assets and having a stable income. Owning companies and properties helps provide retirement security when managed to generate adequate returns. Selection of managers, transparency of performance and monitoring of economic decisions are directly related to the interests of insurers. Independence from government management and economic and military sanctions and tensions are the two main drivers. Therefore, the reforms should consider both the structure of the fund administration and the economic environment of its activity.

Sustainability for the retiree has a tangible meaning: the salary will arrive on time, its purchasing power will be maintained and health services will be available when needed. If the pension is deposited but falls behind the necessary expenses, the goal of economic security is still not realized. Azoji emphasized on the regularity of payment of supplementary insurance obligations so that retirees can receive services and medical centers do not have to worry about collecting claims. Fund reform should see this daily need along with financial balance. If spending cuts weaken support for the elderly, it shifts the problem from fund accounts to families' lives. Trust is maintained when the insurer knows how its resources are being managed and what the reforms will do to its future. Dissemination of clear information and accountability about performance is part of this responsibility. Those who have paid premiums for years expect the end of the job not to be the beginning of insecurity. The success of the reforms should be measured at this point: the retiree can count on his salary and services, and the worker can still trust the promise of tomorrow.