Today, the Decree amending, adding to, and repealing various provisions of the Social Security Law and of the Law on Retirement Savings Systems (hereinafter, the Reform), which modifies the current pension system, was published in the Official Gazette of the Federation.
In general terms, the most relevant changes introduced by the Reform are the following: a) It reduces the number of contribution weeks required to obtain a guaranteed pension or a pension in respect of the severance-at-advanced-age and old-age branches. In this regard, as of January 1, 2021, the number of contribution weeks will be reduced to 750, which will increase gradually, rising by 25 weeks each year until reaching 1,000. At present, 1,200 contribution weeks are required to obtain the aforementioned pensions. b) It increases the total contribution for retirement, severance at advanced age, and old-age insurance. In this regard, as of 2023 the employer's contribution will gradually increase over 8 years, and there will also be an increase in the social contribution (cuota social), so that by 2030 the total contribution increase will stand at 15%. Accordingly, in 2021 and 2022 the total contribution rate of 6.5% will remain in place. It is important to note that the largest increase will impact the employer's contribution. c) It increases the value of the guaranteed pension based on age, weeks contributed, and the contribution base salary. d) It includes the possibility of making withdrawals from the Voluntary Contributions Subaccount at any time. e) It eliminates the statute of limitations for obtaining the funds in the Retirement, Severance at Advanced Age, and Old-Age Subaccount. It is important to note that, in our note of July 24, 2020, we also commented on the main aspects of this Reform; however, in that note we only had the information on what had been announced by the President of the Republic. Nevertheless, you may consult that note here. We remain at your service should you have any questions or require any additional information. For further information, please contact our experts: Rodolfo Trampe, Partner: +52 (55) 5258 1054 | rtrampe@vwys.com.mx Alix Trimmer, Associate: +52 (55) 5258 1016 | atrimmer@vwys.com.mx Alejandro Pérez, Associate: +52 (55) 5258 1054 | alperez@vwys.com.mx
