Mexican Lawmakers Give Approval to President-Backed Pension Fund

Mexico City – In a landmark decision, Mexico’s Senate has approved the creation of a new pension fund aimed at boosting payouts to the lowest-earning recipients. The reform, proposed by outgoing President Andres Manuel Lopez Obrador, aims to ensure that pensioners receive 100% of their last monthly salary, up to about 16,777 Mexican pesos ($975).

The approval of the fund came after a heated debate that lasted well into the evening, with 70 senators in favor, 43 against, and two abstentions. The bill, which had already been approved by the Lower House of Congress earlier in the week, will now go to Lopez Obrador to be signed into law.

Senator Geovanna Banuelos expressed her support for the reform, stating, “Today we fight so that workers can retire with 100% of their salary, so that the workers of this country can enjoy a retirement that gives them dignity and justice.”

The fund will be initially funded by around 40 billion Mexican pesos ($2.32 billion) in unclaimed savings held by workers over 70 years of age in inactive accounts with private fund administrators. However, critics have raised concerns that this could jeopardize the savings of some Mexicans managed by these administrators.

Xochitl Galvez, the leading opposition candidate in Mexico’s upcoming presidential election, accused the ruling party of wanting to use Mexicans’ savings for their own purposes. Despite these criticisms, Mexico’s association of retirement fund entities has reassured individuals that they will continue to have control over their accounts.

This pension reform marks a significant step towards ensuring a more secure and dignified retirement for Mexico’s workers.