Purpose: This research aims to identify the structural roots of wage distortions at the end of the service period and to propose a sustainable reform model. Drawing on international experiences (France, Germany, Sweden, and Turkey), the study seeks to provide an alternative framework to enhance actuarial balance and insurance equity.
Method: This qualitative study employs a descriptive-analytical approach. Data were gathered through library research, analysis of judicial precedents, and official reports (up to 2024). The analysis was conducted using “qualitative content analysis” and “cross-comparative analysis” based on the Most Different Systems Design (MDSD) strategy.
Findings: The results indicate that the two-year basis for pension calculation, by distorting the incentive structure, has led to “moral hazard” and artificial wage increases. This structural flaw, by disrupting the proportionality between contributions and benefits, has intensified the imbalance between the fund’s resources and expenditures. Comparative findings confirm the necessity of transitioning toward long-term averaging and implementing smart oversight to restore equilibrium to the pension system.
Conclusion: This study proposes a multidimensional reform package based on parametric, institutional, and technological reforms. Unlike purely parametric reforms, it emphasizes the integration of changes in the benefit calculation period with institutional and technology-driven reforms. Replacing the current model with a contribution-based framework (such as a point system or notional accounts) would not only strengthen intergenerational sustainability but also ensure distributive equity within Iran’s social security system.