Introduction to Private Pension Plans in Mexico
In Mexico, there are 3,222 private pension plans in addition to the mandatory regime of the Social Security Institute (Seguro Social), covering 1.9 million active workers, which is less than 10% of the working population formally employed, according to the 2025 Statistics Report of the Electronic Registry of Pension Plans.
Composition and Affiliation
According to the Comisión Nacional del Sistema de Ahorro para el Retiro (Consar) report, about one-third of the registered plans belong to foreign companies’ subsidiaries with an international corporate culture.
The majority of the affiliated population consists of high-salaried workers, as 22.3% of those earning more than 20 UMAs (approximately 68,789 pesos per month) are enrolled in some type of pension plan.
“These workers tend to have a high density of contributions and job stability compared to the registered active population in the Sistema de Ahorro para el Retiro (SAR),” noted Consar.
Consar also mentioned that low coverage of occupational pension plans is associated with structural factors in the Mexican labor market, such as high informality or stagnant wages.
Diversity and Payment Structures
Within the pension plans, there is a wide variety of arrangements designed to supplement workers’ incomes and ensure an adequate pension upon retirement.
Some plans are additional to the benefits of the Social Security Law, while others are complementary. Some establish monthly payment of acquired rights, whereas others make a single lump-sum payment; there is also significant heterogeneity in the payments made by different plans.
Each plan defines, approves, and executes its investment policy according to various criteria.
Incentives for Private Pension Plans
To increase pension savings, the Social Security Law (LSS) offers incentives to companies encouraging them to establish and provide their workers with additional pension plans beyond the mandatory regime of the Social Security Institute.
Consar recognizes Electronic Registry Pension Plans as voluntary schemes established by the employer or resulting from collective bargaining, aiming to supplement workers’ income during retirement.
These plans must meet specific requirements, such as providing benefits generally to all workers, properly recording and reporting pension plan funds in the employer’s accounting, and not delivering any direct benefits to workers during their service period.
Coverage and Beneficiaries
Besides benefiting 1.9 million active workers, private pension complementary plans cover 34,591 inactive workers and 86,322 pensioners.
36% are defined-benefit plans:
Consar highlighted that 36% of the private pension plans in Mexico are defined-benefit plans, covering 788,864 workers.
In a defined-benefit scheme, the pension is a fixed amount calculated generally based on the employee’s salary, age, and years of service.
Key Questions and Answers
- What are private pension plans in Mexico? Private pension plans are voluntary schemes established by employers or resulting from collective bargaining, aiming to supplement workers’ income during retirement.
- How many private pension plans exist in Mexico? There are 3,222 private pension plans in Mexico, in addition to the mandatory regime of the Social Security Institute.
- Who benefits from these private pension plans? These plans cover 1.9 million active workers, 34,591 inactive workers, and 86,322 pensioners.
- What percentage of private pension plans are defined-benefit plans? 36% of the private pension plans in Mexico are defined-benefit plans.
- What factors contribute to low coverage of occupational pension plans? Low coverage is associated with structural factors in the Mexican labor market, such as high informality or stagnant wages.
