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 unions, respectively.
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 September.
— to www.lexology.com