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Mexico: Pension System Reform

The Chamber of Deputies on 9 December 2020 passed a pension reform initiative that revises the social security law and retirement savings system.

One of the main changes is that the contribution weeks of workers decreases from 1,250 to 750 weeks. This is the now the number that the Mexican Institute of Social Security (IMSS) requests workers have if they want to receive the benefits of the severance sector in advanced age (60 years) and old age (65 years ), and will increase by 25 each year until reaching 1000 in 2031.

Another significant change is that the contribution rate for social security increases to 15% of the base contribution salary. This is in addition to the rise in the minimum guaranteed pension from, on average, 3,289 to 4,345 pesos. This takes into account the worker’s SBC, the age at which it is requested, and the number of weeks quoted on the date of the procedure.

In addition, the commissions charged by pensions are capped at 0.54%, while the contribution increases from 5.15% to 13.88%. These are some of the reform points that fundamentally seek to address any current issues and support workers when paying their pension.