- Mexico’s business community supported the plan, wanting macroeconomic stability and worrying that the president might take a more radical stance.
- the reform should become law in 2021 and be implemented from 2023 onwards.
Mexican President Andrés Manuel López Obrador released a pension reform plan aiming to boost the average retiree benefit by 40%. The Secretary of the Treasury, Arturo Herrera, assured that this initiative will benefit 80% of the formal workers who earn up to five minimum wages, who will see an increase in their pensions of between 30% and 50%.
The bill increases employers’ contributions by roughly 270%, but the business community supported it, wanting macroeconomic stability and worrying that the president might take a more radical stance.
According to Milenio, the reform, which has yet to be approved by the Chamber of Deputies and the Senate, plans to increase mandatory retirement contributions – topped up by workers, companies and the government – from 6.5% to 15% within eight years, and employers will almost triple their contribution, while those of the worker and the government will depend on the contributor’s income.
If approved, which is almost a certainty given the majority AMLO commands in Congress, the reform should become law by early 2021 and be implemented from 2023 onwards.