The reforms carried out during the government of Andrés Manuel López Obrador made it possible for the country to improve in the 2022 Global Pension Index . It now ranks 29th in the Mercer ranking, with 56.1 points.
Although it is far from the first places such as Iceland, the Netherlands and Denmark, Mexico went from having a category D pension system (one of the worst) to one of category C, being the country with the greatest progress in the .
The index rates the adequacy, sustainability and integrity of the pension systems of 44 countries that bring together 65% of the world’s population.
Compared to 2021, Mexico showed the greatest improvement as a result of the pension reform, which improved outcomes for people and regulation.
The government of Andrés Manuel López Obrador promoted a reform that, among other things, made it possible to reduce the weeks of contributions necessary to reach a pension , from 1,250 to only 750, in 2021. This number of weeks will increase until reaching 1,000 in 2031 This will allow a greater number of people to reach a pension.
Another adjustment was the increase in the mandatory contribution from 6.5% to 15% of the contribution base salary. With the 1997 Law, 6.5% of the contribution base salary was saved. But starting in 2023, the contribution will gradually increase according to the workers’ base salary, to reach 15% of their base salary in 2030.
Finally, it improves the amount of guaranteed pensions. Previously, a worker who did not collect 1,250 weeks of contributions at the time of retirement did not receive a pension. And, if he did, he had a guaranteed amount of 3,289 pesos per month.
Now, a person who retires with 1,000 or more weeks of contributions, at age 65, and with an average salary of 5 UMAs, will receive a guaranteed pension of 8,241 pesos per month. Based on estimates based on 2020 values.
Finally, the commissions charged by the Afores (Administrators of Retirement Funds) were reduced. This improves the savings of the workers.
All these modifications to the pension system allowed Mexico to go from obtaining 44.7 points in 2020 and 49 points in 2021 to having 56.1 points in the 2022 ranking, thus surpassing Peru, Brazil, Italy, Austria, South Africa, among others.
They recommend raising the retirement age in all countries
The report recommended that the retirement age should be raised almost everywhere in the face of growing threats from an aging population, rising public debt and low birth rates.
Thailand, the Philippines, Argentina and India have some of the worst pension systems according to the 2022 ranking.
