Introduction to Reform Timing
According to Pedro Kumamoto, the secretary-general of the Inter-American Conference of Social Security (CISS), each country has its optimal moment for fiscal, pension, or social security reforms. He emphasizes that the decision to implement such changes should be a societal consensus, not solely an executive decision.
Learning from Regional Experiences
Kumamoto highlighted the importance of societal consensus, citing Chile as an example where significant social unrest preceded fiscal and labor reforms. He believes that each society determines the appropriate timing for reforms, including Mexico.
Positive Fiscal Changes in Mexico
Kumamoto acknowledged the positive fiscal changes proposed by President Claudia Sheinbaum’s government, such as health-related taxes included in the 2026 Economic Package. However, he stressed that it’s up to the executive branch to convene society and seek input on whether now is the right time for a fiscal reform.
Sustainability of Mexico’s Pension System
Despite the pressure pensions place on Mexico’s public finances, Kumamoto and CISS believe the pension system is sustainable. The majority of the pension liability comes from contributory pensions, which have secure funding mechanisms.
He noted that while pensions do strain public spending and necessitate efficiency, digitalization, and equity improvements, Mexico is progressing towards complementarity, sustainability, and extending pension coverage to those who have been excluded for many years.
Pension Spending and Public Finances
By 2026, federal pension spending is projected to reach 2.2 trillion pesos, accounting for 22% of total net expenditure and 6.0% of Mexico’s Gross Domestic Product (GDP), according to the Federal Budget Project.
Currently, more is allocated to pensions (both contributory and non-contributory) than to health and education combined. Moreover, the country’s pension liability nearly equals the total revenue from the Value-Added Tax (VAT) and Special Production and Services Tax (IEPS) on gasoline and diesel.
Potential Constitutional Reform for Pemex and Luz y Fuerza del Centro Pension Golden
Regarding a possible constitutional reform to eliminate golden pensions for Pemex and Luz y Fuerza del Centro, as announced by the President, Kumamoto supports it—provided the goal is to end privileges without affecting workers’ achievements through organization and union processes.
He pointed out that special pension schemes for high-ranking public officials are prevalent across America, often leading to collusion and privilege systems rather than genuine social security.
Key Questions and Answers
- What is the CISS perspective on timing pension or fiscal reforms? Each country has its optimal moment, determined through societal consensus rather than executive decision.
- How does CISS view Mexico’s pension system? Despite pressure on public finances, CISS considers it sustainable due to the majority being contributory pensions with secure funding.
- What are Kumamoto’s thoughts on recent fiscal changes in Mexico? He supports proposed health-related taxes but emphasizes the executive branch’s role in convening society for broader fiscal reform discussions.
- What is Kumamoto’s stance on potential pension reforms for Pemex and Luz y Fuerza del Centro? He supports constitutional reform to eliminate golden pensions, provided it ends privileges without affecting workers’ achievements.
