Strengthening Mexico’s Retirement Pension System
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On July 22, 2020, Mexico’s federal government announced
through the Ministry of Finance the “Strengthening the
Retirement Pension System,” a program supported by the
Business Coordinating Council (BCC) and Mexico’s Workers
Confederation (MWC), the employers’ and workers’ largest
The program will be offered as a proposed amendment to modify
several provisions of the Political Constitution of the Mexican
United States, the Social Security Law and the Retirement Savings
Systems Law, regarding the granting and payment of retirement
pensions. The most important provisions of the proposal would:
- Increase the employer’s contribution from 5.15% to 13.87%.
This increase will be gradual over an eight-year period and will be
reflected in the employer-worker contributions.
- Modify the minimum registration weeks (the number of weeks an
employee is registered with the Mexican Institute of Social
Security) required for workers to be entitled to the retirement
pension, from 1250 to 750 registration weeks.
- Increase the minimum retirement pension up to $4,345.00 Mexican
pesos per month.
- Limit the commission charge on retirement savings funds to a
maximum of 0.7%.
- Not impose any additional costs on employees.
It is expected that the amendment proposal will be sent to the
Representatives’ Congress this week to be discussed in
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