Background on the ISSSTE Reform and Its Impact
In January-April 2025, the federal government allocated a significant portion of its public spending (17%) to pension payments, totaling 503,006 million pesos. The majority of these funds went towards solidarity pension systems, such as the one that the CNTE (Coordinadora Nacional de Trabajadores de la Educación) seeks to revert.
Experts’ Opinions on the Proposed Reversal
Alejandra Macías, the executive director of the Center for Economic Research and Budgeting (CIEP), argues that reversing the 2007 ISSSTE reform would be unjust, as it only benefits state workers while neglecting the rest of Mexican citizens.
“Why reverse it only for state workers and not for everyone? It would be completely unjust, not just for pensioners but also for future generations,” Macías questions.
Financial Implications of the Proposed Reversal
Macías also points out that reversing the reform would only increase Mexico’s pension liability, which is already burdensome. Currently, the federal government’s pension obligations equal the total revenue from the Value Added Tax (IVA) and Special Production and Services Tax (IEPS).
Historical Context of the ISSSTE Reform
The 2007 reform, approved during Felipe Calderón’s presidency (PAN), transformed the ISSSTE pension system from a solidarity-based model to an individual accounts system (Afores), requiring workers to save for retirement during their working lives.
Current State of the ISSSTE
Currently, there are insufficient young workers contributing to solidarity pensions for retirees. In 2007, there were 20 active workers supporting each retiree; by 2016, this ratio had decreased to less than one active worker per retiree.
- In 2016, 99.9% of ISSSTE pensions were funded by federal public expenditure, while only 0.1% came from active contributors.
- The proposed CNTE solution to improve pensions is considered limited, as it does not address the fundamental issues of inequity and insufficient funding for the Mexican pension system.
Key Questions and Answers
- What is the proposed reversal? The CNTE demands reverting the 2007 ISSSTE reform to a solidarity pension system.
- Why is this unjust? It only benefits state workers, leaving out the rest of Mexican citizens.
- What are the financial implications? Reversing the reform would increase Mexico’s already heavy pension liability.
- What is the current state of the ISSSTE? There are insufficient young workers contributing to solidarity pensions for retirees.
- What are the fundamental issues of the Mexican pension system? Inequity and insufficient funding.
