Document Type : Research Paper


1 Associate Professor, Accounting Department, Faculty of Managment and Accounting, Allameh Tabataba'i University, Tehran, Iran.

2 Assistant professor, Accounting Department, Faculty of Managment and Accounting, Allameh Tabataba'i University, Tehran, Iran.

3 Associate Professor, Management of Technology and Entreneurship Department, Faculty of Management and Accounting, Allameh Tabataba’i University, Tehran, Iran.

4 Ph.D. Student, Faculty of Management and Accounting, Allameh Tabataba'i University, Tehran, Iran.


Pension funds in Iran use a defined benefit pension plan, and their sustainability is important. However, the evaluation of their sustainability has always been criticized. Minimum reporting and simple accountability indicators do not meet the informational needs of stakeholders. Thus, the main issue is to identify the indicators and standards for a comprehensive evaluation of financial sustainability. To address this issue, the theoretical foundations of sustainability evaluation of pension funds and the indicators applied by other countries and international organizations were examined. The indicators were presented to experts for receiving their opinions and, to reach a consensus on key indicators, a Fuzzy Delphi method was applied. For ranking and developing a combined indicator, the final indicator was obtained using experts' opinions and the SWARA method. 27 indicators in four dimensions were extracted from the theoretical foundations: equity, adequacy, financial, and innovation. According to the results of the Fuzzy Delphi method, 15 key indicators were finally confirmed. Among the key indicators, the support ratio obtained the first rank, while the replacement rate and penetration coefficient obtained the second and third ranks, respectively. The results of the SWARA method confirmed the combined indicator consisting of the equity dimension (1 sub-indicator), the adequacy dimension (3 sub-indicators), and the financial dimension (11 sub-indicators). The weight of equity, adequacy, and financial in the combined indicator is equal to 6%, 21%, and 73%, respectively. The support ratio, the present value of the Assets to Liabilities Ratio, and the actuary analysis obtained ranks 1 to 3. According to the combined indicator, the financial dimension has the highest importance, and despite difficulties such as a lack of resources and liquidity to pay current obligations, attention is focused on equity, adequacy, and innovation. However, combined indicators should always be reviewed.


One of the challenges faced by pension funds and stakeholders in this system is how to assess financial sustainability and reporting. The governance structure, stakeholder relations, management, and accountability of pension funds necessitate attention to the evaluation of sustainability. Occupational pension schemes must provide necessary information regarding retirement plans. The information should be presented in a way that stakeholders can monitor and assess the financial health of occupational pension schemes and determine whether they are capable of fulfilling their contractual obligations. International organizations generally use indicators that are based on accessible information from different countries and therefore have the highest utility for comparison.
In recent years, combined indicators have become one of the most commonly used analytical tools in many fields of social realities. Combined indicators have been widely accepted as useful tools for decision-making and information communication. Combined indicators are a combination of simple indicators with specific weights, where the weights indicate the relative importance that each of them should have in the final overall indicator. Determining the simple and combined indicators for assessing financial sustainability requires a precise understanding and attention to the characteristics of retirement plans, as these characteristics will vary from one organization to another and across different retirement schemes. This research aims to investigate and study the indicators used by international organizations and other countries, providing a scientific basis for evaluating and reporting the financial sustainability of pension funds.


Considering the objective of the research, it is of an applied nature. In terms of implementation, this research is field-based. The research is of a mixed nature, meaning it consists of two components: qualitative and quantitative. The research, in terms of data collection, is conducted in a real and unadulterated manner and falls into the category of descriptive (non-experimental) research with a survey and exploratory approach. To properly conduct the research and achieve scientific results, four main stages of development and actions have been undertaken.
The first stage involves reviewing and studying the theoretical foundations of evaluating the financial sustainability of pension funds and the indicators used in other countries, as well as identifying evaluation models used by international institutions to access proposed indicators, seek expert opinions, and obtain consensus on them. The second stage includes seeking expert opinions on the extracted key indicators from the theoretical foundations of the research to select acceptable indicators based on the conditions of Iranian pension funds. The Fuzzy Delphi method was used to seek expert opinions. In the third stage, the SWARA method was used to determine the weights of key indicators. Finally, in the last stage of the research, the findings and results are compared and aligned with the combined indicators used by other countries and international institutions.

Results and Discussion

This study analyzes a significant number of indicators of pension system sustainability. In conducting this research, using literature and scientific texts, the indicators for evaluating the sustainability of pension funds were identified in terms of adequacy (6 indicators), equity (4 indicators), financial (14 indicators), and innovation (3 indicators). Based on the consensus of experts, key indicators were finalized in three dimensions. The results indicate a combined indicator consisting of the dimensions of equity (1 sub-indicator), adequacy (3 sub-indicators), and the financial dimension (11 sub-indicators). In the next stage, using the SWARA method, weights were assigned to each of the indicators. Based on the ranking performed in the combined indicator, the equity dimension, including one indicator (implicit pension debt), accounts for 6% of the weight of the combined indicator. The adequacy dimension, composed of indicators such as replacement rate, asset growth rate, and asset growth rate to inflation ratio, accounts for approximately 21% of the weight of the combined indicator. Lastly, the financial dimension, being the most influential, accounts for 73% of the weight of the combined indicator and includes indicators such as population coverage ratio, support ratio, dependency ratio, consumption-to-resource ratio, consumption growth rate-to-resource ratio, current asset value-to-obligations ratio, accumulation rate, insurance contribution-to-pension payment ratio, actuarial analysis, economic dependency ratio of the elderly, and funding ratio. Considering the obtained combined indicator, it can be stated that the financial dimension indicators have the highest importance, followed by the sub-indicators of the adequacy dimension.


The results of this study indicate that reporting and evaluating the financial sustainability of pension funds have faced challenges, including the lack of consensus on evaluation indicators. Published reports on the status and financial performance of pension funds have not been aligned with the characteristics of pension funds and stakeholder needs. Additionally, it is observed that some of the theoretical indicators mentioned in the literature do not correspond with the indicators used by international organizations (particularly the actuarial ones). According to the combined indicator, the financial dimension has the highest importance, and despite difficulties such as lack of resources and liquidity to pay current obligations, attention is focused on equity, adequacy, and innovation. However, combined indicators should always be reviewed.
To address the existing issues at the operational, supervisory, and standard-setting levels, sufficient and effective measures need to be taken to advance the goals of sustainability assessment and reporting. Standard-setting organizations in the field of sustainability can play a crucial role in enhancing sustainability knowledge through educational development. At the organizational level, strong official support and senior management commitment are required for the development of sustainability assessment processes, and necessary training should be provided. It is important to pay more attention to the concepts and indicators of sustainability assessment to foster a better mindset towards sustainability and reporting. Regulatory bodies and stakeholders should employ innovative approaches in their assessments, including the performance of pension funds. The use of simple indicators may not provide sufficient information, so it is better to utilize combined indicators and update them to align with the characteristics of the pension fund's operating environment.


Main Subjects

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