Observation (CEACR) - adopted 2013, published 103rd ILC session (2014)

Social Security (Minimum Standards) Convention, 1952 (No. 102) - Mexico (Ratification: 1961)

The Committee has taken due note of the detailed reports sent by the Government on the manner in which the Convention is applied in law and practice, as well as its replies to the many comments previously received from workers’ organizations. In the light of the communications sent by organizations representing workers and protected persons, the Committee notes that the implementation of national social security legislation is fuelling considerable discontent and raising serious questions about the personal coverage of the system, income security in old age, and the provision and funding of health care. While the Committee agrees with the Government that some of these issues call for actions that are incumbent upon the legislative authority, the Committee would like to point out that the concerns raised by the trade unions relate to the predictability and adequacy of benefits, as well as on the need to ensure the financial, budgetary and economic sustainability of the system and, as such, they are related to the main objectives of the Convention. The Committee hopes that the Government will reply to these concerns effectively, in association with the representative employers’ and workers’ organizations and other relevant organizations representing the persons concerned, and with the help of the Office if necessary. With a view to having a better understanding of the application of the Convention in the country, the Committee would like to continue the dialogue with the Government and social partners to identify the prerequisites for improving the functioning of the social security system in law and practice in order to fulfil the requirements of international social security standards ratified by Mexico.

Part XI of the Convention. Calculation of periodical payments. Article 6, read in conjunction with Article 28 of Part V (Old-age benefit). Since Mexico first introduced in 1997 a system of compulsory individual capitalization accounts for any person entering the labour market after this date, the Committee has regularly pointed out that the protection guaranteed by this type of system is contingent upon the profitability of the funds invested and that there is no mechanism for reviewing the assets in relation with prices, wages or a combination of both. Consequently, this system does not provide the guarantees required under Article 65 of the Convention with respect to the minimal replacement rates that have to be guaranteed after a certain period of contribution in relation to the earnings of the persons concerned. Since 2007, a similar scheme has also been applied to the public sector. The Committee notes with regret that, notwithstanding various requests it has made, the Government has not proven by means of statistics that the replacement level of 40 per cent required by the Convention has been reached. The Mexican legislation nevertheless provides for the payment of a minimum guaranteed pension when the funds available in workers’ individual accounts do not ensure a certain level of pension for their beneficiaries. This minimum wage guaranteed by the State is equal to the general minimal wage for the Federal district in the private sector, and twice this amount in the public employees’ scheme. The fact that there is a minimum guaranteed pension makes it possible to examine the compliance of the Mexican pension scheme with Article 66 of the Convention, and to ascertain whether the level of the guaranteed minimum pension accounts for at least 40 per cent of the reference wage of an ordinary adult male labourer selected, in accordance with the methodology established by this provision of the Convention. The Committee regrets that the Government has not replied to its questions on this matter and has not proven that the amount of the minimum state guaranteed pension (when the funds accumulated in the individual accounts of persons insured with the Mexican Institute of Social Insurance (IMSS) or the State Workers’ Social Security Institute (ISSSTE) schemes do not enable them to benefit from a pension at least equivalent to the minimum pension) reaches the minimum established by this provision of the Convention. The Committee therefore concludes that the pension system in Mexico does not comply either to the requirements under Article 65 or Article 66 of the Convention.

Article 71(3), read in conjunction with Article 72(2). General State responsibility for the provision of services and the proper administration of social security institutions and services. In its comments received on 31 August 2012, the National Union of Workers (UNT) alleges that the adoption of the Act on the ISSSTE in 2007 resulted in nullifying the principle established by the countries’ Constitution whereby the State shall assume responsibility for guaranteeing protection against social and economic risks. The reform was undertaken without making a proper diagnosis of the state of the hotel infrastructure and health-care services, of which funding was not guaranteed – only 22 per cent of pensioners’ required health-care services are funded, for example. In fact, only about 14 per cent of public employees opted for the new system, which reveals the limited interest of the protected population. This entailed costly adjustments and considerable transfers of public funds to offset the lack of funding from the contributions of persons covered (4.2 per cent of the 2012 GDP between 2007 and 2011). The actuarial report conducted in 2010 acknowledged that the ISSSTE reform had not entirely resolved the problem of the funding of health-care services. Pointing out that the ISSSTE reform was implemented in 2007, the UNT believes that the ISSSTE should publish disaggregated and full information that provides a global overview of the situation and adherence to objectives, as well as of the Institute’s future viability. In this context, the Committee notes that the Government intends carrying out an actuarial survey on the various pension schemes and health services as prescribed by the Convention. The Committee requests the Government to communicate the findings of this survey to the social partners and supply a copy of it with its next report. The Committee also notes the information provided by the Government in its 2011 and 2012 reports concerning measures taken to bring the ISSSTE deficit under control, such as: the covering, by the federal Government, of the pensions paid under the transitional scheme and deficits, in accordance with section 231 of the Act on the ISSSTE; the establishment of a reserve fund; and the actualization and review of contributions every four years. The Committee hopes that as a result of these measures, the Government will be able to indicate in its next report that the social security system is once again on the way towards sustainable development.

Article 18. Limitation on the duration of sickness benefits. The Government states that, according to section 37 of the Act on the ISSSTE, sickness benefits are paid during a period ranging from 30 to 120 days depending on the seniority of the employee concerned. Recalling that the Convention stipulates that the payment of benefits shall be granted throughout the contingency, while authorizing that the benefit may be limited to 26 weeks in each case of sickness, the Committee requests the Government to indicate the measures taken or envisaged to ensure respect of this requirement of the Convention.

Article 29(2). Reduced pension after 15 years of contribution or employment. The Committee notes that in order to benefit from an old-age pension on the basis of accumulated funds in a person’s individual capitalization account or on the basis of a state guaranteed minimum pension, a person protected under the IMSS or ISSSTE scheme must justify 25 years of contribution and have reached the age of 65 years. It the protected person has not fulfilled the minimum qualifying period of contribution, he or she may continue to pay contributions or receive a lump sum. Recalling that the Convention guarantees a reduced benefit to a protected person who has completed a qualifying period of 15 years of contribution or employment, the Committee asks the Government to indicate how the national legislation gives effect to this requirement of the Convention.