Background on the ISSSTE and its Relevance
The Instituto de Seguridad y Servicios Sociales de los Trabajadores del Estado (ISSSTE) is Mexico’s social security system for government employees. It provides pensions, healthcare, and other benefits to over 2 million workers and their families. The ISSSTE has undergone several reforms, including the 2007 amendment that transitioned state workers into individual retirement accounts managed by private financial institutions known as Administradora de Fondos para el Retiro (Afores).
The Decree and Its Implications
On Tuesday, President Claudia Sheinbaum published a decree in the official gazette (Diario Oficial de la Federación, or DOF) to reduce the minimum retirement age for ISSSTE workers by three years. This change affects all state employees under the tenth transitional article, totaling approximately 967,980 workers in 2023, not just teachers.
Details of the Decree
- The decree confirms that the benefit applies to all state workers under the tenth transitional article.
- It recognizes the right of state workers to a “just and dignified” retirement pension.
- The minimum retirement age will be frozen at 56 for women and 58 for men until 2028, after which it will gradually decrease by three years every three years.
- By 2028, the minimum retirement age will be reduced to 55 for women and 57 for men.
- By 2031, it will be lowered to 54 for women and 56 for men.
- Finally, by 2034, the minimum retirement age will be 53 for women and 55 for men.
Financial Impact and Expert Opinions
The decree reverses the progressive increase in retirement age that would have reached its peak in 2028 due to the 2007 ISSSTE reform. At that time, workers could choose between joining the new Afores system or staying in the old solidarity system. Those who opted for the latter, approximately 90% of state workers, were placed in the tenth transitional modality, with their minimum retirement age incrementally raised every two years.
Secretary of Public Education, Mario Delgado, warned that the reduction in retirement age would have a “significant fiscal cost,” estimated at over 36,000 million pesos between 2025 and 2030. However, experts and ISSSTE projections suggest that the peak of retirees from the tenth transitional article will occur between 2030 and 2040, meaning the state will need to allocate more resources for reduced retirement ages during that decade.
Additional Decree: Usicamm’s Dissolution
Alongside the retirement age decree, another measure was published to dissolve the Unidad del Sistema para la Carrera de las Maestras y Maestros (Usicamm). This move aims to facilitate the mobility of teachers between schools.
President Sheinbaum’s Commitments
In her press conference on Monday, President Sheinbaum stated that these decrees were part of the commitments made with teachers.
Key Questions and Answers
- Who is affected by this decree? All state workers under the tenth transitional article of the ISSSTE, approximately 967,980 in 2023.
- What is the current minimum retirement age for ISSSTE workers? Before the decree, it was gradually increasing based on the transitional article.
- What is the new minimum retirement age schedule? It will be frozen at 56 for women and 58 for men until 2028, then decrease by three years every three years until reaching 53 for women and 55 for men by 2034.
- What are the financial implications of this decree? The Secretary of Public Education estimates a significant fiscal cost, though experts suggest the impact will be more pronounced between 2030 and 2040.
- What is the Usicamm and why was it dissolved? The Usicamm was a system for teachers’ career advancement. Its dissolution aims to improve teacher mobility between schools.
