An Assessment of the 2019 and 2020 Pension Reforms in Mexico

March 8, 2024

Preview Citation

Format: Chicago

Boele Bonthuis. An Assessment of the 2019 and 2020 Pension Reforms in Mexico, (USA: International Monetary Fund, 2024) accessed November 23, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

In recent years the Mexican pension system has changed significantly. In 2019 the existing means-tested social pension was made universal – covering everyone over the age of 65 – and the benefit level increased. In 2020, the main regime of the private sector was substantially reformed, increasing contribution rates for the funded defined contribution system, lowering the minimum years of contributions needed to receive an earnings-related pension, and increasing minimum pensions. This paper tries to assess the likely outcomes of those reforms, discusses design inefficiencies of the reforms and offers policy options to improve pension system design.

Subject: Aging, Expenditure, Labor, Pension spending, Pensions, Population and demographics, Retirement, Wages

Keywords: Aging, Caribbean, Central America, Design inefficiencies, Design inefficiency, Funding, Labor supply incentives, Minimum pension, Pay-as-you-go, Pay-as-you-go pension accrual, Pension calculation, Pension reform, Pension spending, Pension system design, Pensions, Retirement, Wages

Publication Details

Pages:

55
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2024/053
Stock No:

WPIEA2024053
ISBN:

9798400269431
ISSN:

1018-5941

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