Pension payment is based on minimum wages and not UMA: SCJN

The jurisprudence issued by the Supreme Court of Justice of the Nation (SCJN) establishes that the Unit of Measure and Update (UMA) may not be used to determine the daily quota or the payment limitation of a pension, given that it is a benefit of a labor nature based on the minimum wage.

Workers manifested their disagreement before the 18th Collegiate Court in Administrative Matters of the First Circuit to make their pensions effective, with the objective of preventing the use of the UMA to determine their pensions, as the value of the UMA is lower than the value of the Minimum Wage, thus affecting their income.

The Unit of Measure and Update was created in 2014 after the changes made by the Federal Congress to disassociate the minimum wage as the counting, base, measurement or economic reference unit in the Federal, state or Mexico City laws.

This paved the way for the publication, in the Official Gazette of the Federation in 2016, of the mechanisms under which the UMA would be determined as this was considered to be the first step for establishing policies for the recuperation of the purchasing power of the minimum wages, gradually compensating for the cumulative loss of over 70% for more than 30 years.

The SCJN published labor jurisprudence 2020651 last Friday, establishing that “the retirement pension of the workers is a Social Security benefit derived from the employment relationship and based on the salary itself; in fact, in order to generate it and pay it, the fund created throughout the active labor life of the worker through dues from the received salary is the basis for it; these dues are capped at ten times the minimum wage. It is clear that this is a labor benefit”.

The minimum wage is currently set at 102.68 pesos per day throughout the country and at 176.72 pesos per day in the Northern Border, while the UMA, which is defined by the National Institute of Statistics and Geography (INEGI), is set at 84.49 pesos per day.

Furthermore, the jurisprudence of the Court states that in all matters relating to the pension “the salary must be used in regard to its amount, payment update or maximum limit, as these are matters that do not fall outside of its nature; additionally, to take the Unit and Update into account for these matters would denaturalize the pension and an economic factor that is foreign to the referred Social Security benefit, different form the salary and foreign to the pension would be used and this is not legally permissible.”

In this regard, Ricardo Martínez Rojas, partner at the De la Vega & Martínez Law Firm stated that “the Social Security (IMSS) Law and the complete financial Structure of the IMSS have always been based on minimum wages; in fact, the collection of the maximum due is set at 25 times the minimum wage and we must take into account that when a pension is paid, a part of the salary is being paid; this is why it is called social security dues base salary.” He added that workers have been paying their dues based on the minimum wage since the Law of 1973.

Originally published in “El Economista” by María del Pilar Martínez, September 24th, 2019

Source: You Tube / El Economista Tv