Background on the Issue
The teachers from the CNTE (National Coordinating Workers’ Section) exerted pressure, and the government conceded. As a result, all taxpayers will be responsible for paying 350,000 million pesos to bureaucrats and teachers so they can retire with 7 to 9 years less than the typical retirement age of 65.
Who are the Teachers from CNTE?
The National Coordinating Workers’ Section (CNTE) is a powerful union of teachers in Mexico, known for their strong advocacy and protests. They represent educators primarily in the southern states of Oaxaca, Michoacán, Guerrero, and Chiapas. Their demands often revolve around better working conditions, salaries, and pension reforms.
Why is this Relevant?
This pension reform affects the retirement age for a specific group of teachers who opted to remain in the modified ISSSTE (Instituto de Seguridad y Servicios Sociales de los Trabajadores del Estado) regime. This group consists of approximately 970,000 workers, including teachers, who will now be eligible to retire at 58 for men and 56 for women, which is significantly earlier than the general retirement age of 65 in Mexico.
Government’s Response and Fiscal Impact
President Claudia Sheinbaum and Education Secretary Mario Delgado announced the pension reform, acknowledging that it would have a significant fiscal cost.
The official cost estimate for the period 2025-2030 is 36,000 million pesos. However, non-governmental calculations by former Consar (National Savings and Credit System) president Carlos Ramírez estimate the long-term cost to be 350,000 million pesos.
The burden of this pension reform will primarily fall on future governments, with the majority of costs accruing after 2030.
Teachers’ Demands and Government’s Concessions
Despite the government’s generous offer, teachers have stated they will continue protesting until the 2007 ISSSTE reform, implemented during Felipe Calderón’s presidency, is repealed. This reform replaced the solidary pension system—where the state guaranteed a pension based on the employee’s last salary and years of service—with an individual account model managed by Afores (private pension funds).
The teachers are demanding the elimination of the private pension system operated by Afores. President Sheinbaum has rightly pointed out that dismantling the Afores regime is unfeasible, as it would place an unsustainable burden on the state.
Future Implications
The government’s concession on the reduced retirement age may encourage further pressure from CNTE. The teachers’ ongoing protests highlight the complexities of pension reform and the delicate balance between meeting demands and ensuring a sustainable system for all.
Key Questions and Answers
- What is the pension reform about? The reform reduces the retirement age for a specific group of teachers who opted to remain in the modified ISSSTE regime, allowing them to retire at 58 for men and 56 for women.
- Who are the teachers involved? The teachers involved are primarily from the CNTE union in southern Mexico.
- What is the fiscal impact? The long-term cost of this pension reform is estimated to be 350,000 million pesos, with the majority of costs accruing after 2030.
- What are the teachers demanding? The teachers are demanding the elimination of the private pension system operated by Afores.
- Why is this a complex issue? Pension reform involves balancing the demands of specific groups with ensuring a sustainable system for all taxpayers.
