Mexico Government Plans Pension System Overhaul, Reforma Saysby
Mexico’s government is preparing a proposal to overhaul the nation’s pension system in April, newspaper Reforma said, citing Senator Fernando Mayans, the president of the chamber’s Social Security commission.
Mayans said Finance Minister Luis Videgaray met with senators to plan the reforms, which will consider the impact on individual pension accounts from changes in demographics, the structure of salaries, economic growth and unemployment, Reforma reported.
The government will spend 618 billion pesos ($37.6 billion) on pensions in 2016, about one-sixth of federal spending, and in 2017 pension spending will exceed investment, Reforma reported, citing Carlos Ramirez, head of the national commission for the retirement savings system.
A 1997 overhaul of the system was a failure because 86 percent of workers decided to retire under a defined benefits law from 1973 and only 14 percent opted for individual accounts, Reforma said.