Note published on November 25 in Business Insider, Estrategia [Strategy]Section, by César Salomón Rodríguez.
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- People who retired on a pension under the Social Security Law (LSS) of 1973 receive a year-end bonus.
- The exceptions to the rule are CFE [Federal Electricity Commission], Pemex and IMSS [Mexican Social Security Institute] workers, who receive this payment through their collective bargaining agreement.
- This year will be the first year in which retirees under the LSS of 1977 will not receive a year-end bonus.
November 1 was one of the most anticipated days for retired workers in the country. At least, pensioners of the Mexican Social Security Institute (IMSS) received the good news that the payment of their year-end bonus would reach their pockets on that day.
Before the pandemic, this was a time for getting together with the family, socializing, giving and receiving gifts and, of course, receiving this payment. Almost all workers receive this benefit around this date.
Not all of them, however, have the same certainty. Some pensioners face uncertainty on whether they will receive their year-end bonus or not. Two examples are 65-year-old Irma, who retired four years ago and María, who is the same age, also recently retired. The former has already received her year-end bonus and the latter is uncertain on whether she will receive it.
Irma started working in the 70’s, when she was young, while María’s circumstances were different and her working life started as a mature woman, back in 1998.
Labor experts agree that pensioners have the right to a pension; nevertheless, the secret on whether they will receive a year-end bonus or not lies in knowing the pension law under which they retired.
There are currently two laws that determine workers’ retirement and, therefore, their pension and their consequent year-end bonus, if applicable. They are the Law of 73, as it is commonly known, and the Law of 97, a reform made during the government of the President Ernesto Zedillo.
Pensioners under the Law of 73 receive a year-end bonus
Ricardo Martínez, partner of the De la Vega y Martínez Rojas Law Firm, told Business Insider México that it is important to know which was the legal framework under which the working life ended.
“They have a year-end bonus under the Law of 73. We should recall that we do not yet have retirees under the Law of 97. This year we will begin having retirees under the Afores [Retirement Funds Administrators]”.
“And let me tell you something that is very sad, because out of 75,000 workers that should already have a right to a pension under the Law of 97, the Law of the Afores, only five persons would have this right if the Law had been applied as such (…) only this year will we see that they start being pensioned under the Law of the Afores and that law does not include a year-end-bonus”, said the expert.
Article 167 of the Social Security Law of 1973 states, in its last paragraph, that the IMSS will give pensioners included in this chapter, a year-end bonus equivalent to a monthly payment of the pension that they receive.
Meanwhile, Article 155 of the 1997 Social Security Law states that early retirement forces the IMSS to provide, as benefits, the pension, medical assistance, family allowances and relief aid. It never refers to a year-end bonus.
Year-end bonus for IMSS Pensioners
IMSS pensioners receive 3 months of pension as a year-end bonus. The payment is made in a single installment and, in accordance with the Ministry of Finance and Public Credit, it was deposited on November 1 of this year.
Year-end bonus for ISSSTE Pensioners
For its part, pensioners from the Institute for Social Security and Services for State Workers (ISSSTE) receive 2 months of pension as year-end bonus.
ISSSTE pensioners received the first part of their year-end bonus corresponding to 2021 on November 10 and they will receive the second part this coming November 29. The deadline for receiving it is January 15, 2022.
Why are there pensioners who do not receive a year-end bonus?
Although pension laws are very clear, there are some exceptions that can help workers receive their year-end bonus.
“The ones retiring under the Law of 97 will no longer receive a year-end bonus, unless the employer assumes the obligation, through the Collective Bargaining Agreement, of paying pensioners a year-end bonus as in the case of the Federal Electricity Commission (CFE), in the IMSS and in Pemex”, he said.
Data from the Oficina Empleo portal shows that the companies in which the highest year-end bonuses are received, thanks to the Collective Bargaining Agreements (CCTs) or the obtained benefits, are the IMSS, where its workers, under their CCT, receive a year-end bonus of three months of their nominal salary, the one that is received before taxes.
We find that government workers hold the second place, receiving 40 days of salary as this benefit; the third place goes to the people in the military, who receive 40 days of year-end bonus without any deductions.
In fourth place among Mexican workers with the best year-end bonus, we have the ones belonging to the CFE with their 61 days of year-end bonus and in fifth place we have Pemex, who receive 60 days of salary.
Uncertainty among some pensioners in regard to their year-end bonus
Irma and María will have a different end of the year. The former will have a year-end bonus because she retired under the 1973 Social Security Law. María will have to wait to learn what her pension will be under the newly approved reforms, but no, she will not receive a year-end bonus.
And how do they calculate what my pension will be?”, María wonders.
According to the Afore Principal portal, “each active worker before the Social Security Institute has an individual account destined to the Afores. Workers contribute 6.5% of their salary, the employer contributing 5.150%, the employee 1.125% and the government 0.225%.
“These resources destined to your Afore will be deducted automatically from your payroll by the company that you work for.” Once María retires, everything that has accumulated will be divided and given as a monthly pension for the rest of her life. One thing is sure, she will not receive a year-end bonus.
Those working under the 1997 Social Security Law, however, received good news for the end of this year, although these news are not in relation to the year-end bonus.
“This is why the reform that raised employer contributions came and lowered the number of weeks of paid contributions. Weeks of paid contributions were lowered from 1,500 to 1,000, but the contribution by the employer was also raised from 5.25% to 15%, although this will increase from 2022 on, when the contribution will start to increase”, he ended.
