Vulnerable population in the employment area will obtain pension: De La Vega & Martínez Rojas

Note published in  Al Momento, in the Economía [Economy] section  by the Editorial Department
Read the note in its original source

Note published in Índice Político, in the Economía [Economy] section by the Editorial Department
Read the note in its original source

COVID-19 has worsened the national panorama in regard to unemployment, low salaries, labor instability and the growth of the informal sector. A reflection of this is that it has become more complex to comply with the requirements to obtain a pension. De La Vega & Martínez Rojas

Ricardo Martínez, specialist and founding partner of the D&M labor legal Firm D&M, explained that the problem lies in the fact that workers fail to comply with the required 1,250 weeks of payment of social security dues or do not have the necessary capital to generate the minimum guaranteed pension (3,274 pesos per month).

Likewise, he explained, “Afores [Retirement Funds Administrators] have invested a large part of the capital in government bonds and with high commissions; these factors have caused the individual accounts to have insufficient capital to, at least, generate the minimum guaranteed pension, which makes it necessary to reduce the weeks of payment of social security dues in order to provide the minimum guaranteed pension”.

Martínez Rojas stated that the pension system in the country is unequal, while “the portfolio of retirees from PEMEX, the CFE and the IMSS – the only ones that retire with 100% of their integrated salary, and which increase with every revision of their Collective Bargaining Agreements – represents an expense of nearly 850,000 million pesos”.

On the other hand, many workers started to contribute when they were between 30 and 40 years old; in 2021, there will be about 75,000 workers insured solely by the Afore who will reach retirement age and only 5% of them will have the right to a pension.

In the face of these problems, caused by a deficient pension model in addition to the current economic crisis, “the possibility of the beneficiaries having the right to withdraw the capital from their individual accounts was considered; however, this amount could run out quickly, before time, with the result of the workers not having a pension for their old age, which poses a serious social and economic program for the Mexican population.

Therefore, a Reform of the Pension System is considered to be essential, taking the following terms into account: Reducing the number of weeks of compulsory payment of social security dues for retirement from 1,250 to 750; gradually increasing the employer’s contribution from 5.50% to 13.875% of the base salary for paying social security dues for the retirement, old-age unemployment insurance and old age areas.

“Modifying the Pension System is a fundamental task that will avoid a serious social and humanitarian problem for future pensioners. 12.3% of the population in Mexico is above 60 years old and their main source of income is through retirement benefits or a pension, according to data from the 2018 National Survey of Demographic Dynamics (ENADID)”.

We have ceased being a country of young people, to become a country of old people that require a pension to live”, emphasized lawyer Ricardo Martínez.