MEXICO CITY, Mexico – President Andres Manuel Lopez Obrador of Mexico revealed plans to introduce a new fund aimed at enhancing lower pensions in the system by May 1, just ahead of presidential elections. This initiative, part of a larger pension reform proposed by the president in February, received approval from the country’s lower house on Monday and now awaits Senate approval.
During a press conference, Lopez Obrador expressed his hope to deliver positive news to workers on Labor Day by guaranteeing their pensions and increasing them. The government intends to inject around 40 billion pesos into the fund initially, using unclaimed savings from workers aged 70 and above. This funding aims to ensure that retirees earning up to 17,000 pesos ($1,001.77) monthly receive 100% of their salary post-retirement.
Despite government reassurances, the opposition has raised concerns about the potential risks to workers’ savings managed by private companies. Although the administration pushes forward with its plans, criticisms from some lawmakers focus on the rapid approval of the bill by the lower house, citing political motives and potential constitutional issues.
President Lopez Obrador acknowledged the likelihood of the Supreme Court declaring the new fund unconstitutional, emphasizing the need for careful consideration. However, Mexico’s retirement fund entities association stated that individuals will retain control over their accounts despite the new initiative, which comes as a relief to many amid uncertainties surrounding the pension reform.
By the end of March, the private retirement system managed over 6.1 trillion pesos ($359.46 billion), underscoring the significant financial stakes involved in the pension sector. As the push for pension reform continues, keeping a close eye on how these changes impact workers and their retirement savings remains crucial for all parties involved.