An Assessment of the 2019 and 2020 Pension Reforms in Mexico

Boele Bonthuis

No 2024/053, IMF Working Papers from International Monetary Fund

Abstract: 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.

Keywords: Pension reform; funding; pay-as-you-go; labor supply incentives; design inefficiencies; pension system design; pension calculation; minimum pension; pay-as-you-go pension accrual; design inefficiency; Pension spending; Pensions; Wages; Aging; Retirement; Caribbean; Central America (search for similar items in EconPapers)
Pages: 55
Date: 2024-03-08
New Economics Papers: this item is included in nep-age
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