Iran Faces Deepening Crisis: Pension Fund Collapses Leave Elderly Without Essential Insurance Amid Aging Population Challenges

Iran is currently facing a critical challenge as its pension and healthcare systems teeter on the edge of collapse due to structural neglect, rising government debt, and a rapidly growing elderly population. This alarming situation has significant implications for millions of retirees who depend on these vital services.

The demographic and financial crisis unfolding in Iran is unprecedented in its modern history. The elderly population is on the rise, driven by declining fertility rates and increasing life expectancy. This demographic shift has resulted in a systemic failure to support pension funds, leaving many retirees without essential insurance services. Below are some key points that highlight the severity of the situation:

• Demographic Shift: The elderly population in Iran is expected to double within the next two decades, presenting a challenge that cannot be managed gradually.
• Falling Fertility Rates: The crude birth rate plummeted to just 11 births per 1,000 people in 2024, a dramatic 76% decline over the past 60 years.
• Increasing Life Expectancy: By 2051, projections indicate that more than 30% of Iran’s population will be aged 60 or older.

As the elderly population grows, Iran’s healthcare and pension systems are under immense strain. Unlike developed countries, where demographic transitions occurred gradually, Iran’s situation is developing rapidly. The country is witnessing a significant rise in chronic health conditions among older adults, which increases the demand for medical care.

This demographic transition is exacerbated by the weakening of traditional family caregiving networks, resulting in a higher demand for costly long-term care services. The public finances of Iran are now threatened through various channels, most notably the widening deficits in major pension funds. These funds operate on a pay-as-you-go basis, meaning that with fewer workers contributing and more retirees drawing benefits, the support ratio is shrinking.

The growing financial strain is evident in the rising share of government subsidies to the Civil Service and Military Pension Funds. These subsidies increased from approximately 11% of public spending in 2013 to nearly 19% by 2021. This trend indicates that pension deficits have transformed into a significant burden on the state, effectively functioning as a quasi-tax. As the active labor force diminishes and economic growth slows, the establishment of a publicly funded long-term care system appears increasingly unlikely.

Currently, long-term care in Iran is predominantly financed out of pocket. Families are forced to hire caregivers or nurses privately, often facing exorbitant costs. Estimates suggest that round-the-clock home care for a fully dependent elderly individual can cost between 20 and 25 million tomans per month. Even institutional care in nursing homes can range from 5 to 15 million tomans or more. The lack of sufficient insurance coverage for these continuous and long-term services rapidly depletes household savings and plunges middle-class families into financial distress.

In the midst of this escalating crisis, Ali Dehghan-Kia, the head of the Tehran Social Security Retirees Association, announced the cessation of supplemental insurance for Social Security retirees as of November 22, 2025. Retirees are now limited to receiving treatment only in Social Security-owned or affiliated facilities. Negotiations between the Social Security Organization and the insurer Atieh Sazan have stalled, primarily due to the organization’s failure to pay premiums on time, leading to the suspension of supplemental coverage.

Ahmad Panjaki, a board member of the Retirees Association, noted that the previous monthly premium of 300,000 tomans was equally shared between the organization and retirees. It is important to highlight that 60% of retirees receive only minimum pensions, making it challenging for them to meet their basic needs.

The root of this crisis lies in the government’s ongoing refusal to fulfill its financial obligations. Chronic non-payment of debts to pension funds, along with continuous withdrawals from their assets and systemic mismanagement, have severely crippled institutions like the Social Security Organization and Shasta. What should have been reliable financial and social safety nets for millions of retirees have instead been hollowed out by decades of irresponsible governance and corruption.

The outcome is a structural and deeply ingrained deficit that directly translates into the loss of essential insurance services, such as supplemental coverage, leading to worsening poverty for Iran’s elderly population. As the aging demographic accelerates, the government’s failure to address this demographic and financial crisis poses a serious threat not only to retirees’ livelihoods but also to the economic stability of the entire nation.

For Iran to mitigate this pressing issue, a comprehensive strategy to reform the pension and healthcare systems is essential. Without immediate and effective action, the consequences of this crisis will continue to escalate, further jeopardizing the wellbeing of millions of citizens.