What does the Pension Fund for Wellbeing initiative consist of?

MEXICO CITY.— This Thursday morning, during his usual morning conference, the president of Mexico, Andrés Manuel López Obradorassured that “there is nothing to fear” regarding the initiative promoted by his party in the Chamber of Deputies to create the Pension Fund for Welfare (FPB).

A journalist who attended the morning conference pointed out that the initiative presented yesterday Wednesday by the Morenoist deputy Ignacio Mierfor the creation of the new Pension Fund for Welfarehas generated fears and doubts.

The initiative proposes that the new fund be financed with the savings of workers over 70 years of age who have contributed to the Afores.

President López Obrador assured that there is nothing to fear because the reform to finance workers’ pensions, with unclaimed Afores accounts, is so that the government has 40 billion pesos that remain in the administrators for retirement.

In the National Palace, López Obrador explained that this is intended to be another of the sources of financing for the Welfare Pension Fund.

“For all workers: Afores are not touched, they are protected, there is nothing to fear, on the contrary,” he expressed.

The head of the Executive clarified that if a worker claims these resources, there will be a fund to return his money.

“The Afore administrators are left with unclaimed pensions, some time passes and they keep that money, that’s why they make noise, because that money stays with them. If a person does not claim, it is left to the Afores,” she mentioned.

He pointed out that his opponents want to distort and manipulate the reform, pointing out that the government wants to steal the Afores or that it would be like another Fobaproa.

“It’s a good thing, but this, I don’t know what’s happening to them. “We are not using anything from the Afores,” said the president.

The resources would be automatically transferred to the new fund when the worker who has contributed in the private sector turns 70, and the savings of State employees would be taken to the fund in the same way when they turn 75.

What does the initiative to create the FPB consist of?

Las Fund Administrators (Afores) must transfer the resources of the subaccounts at the time the workers turn 70 years old, without the need for a judicial resolution, to the Welfare Pension Fund, and must notify the institute of each transfer on the same day it is carried out,” details the project.

Mier Velazco stated that with this reform, around 45 million workers would have a pension of 16,400 pesos to 18,000 pesos.

He explained that the purpose of his initiative presented last week is to assure workers who joined the workforce following the 1997 reform.

“(That) they have at least guaranteed with the Fund a pension of 16,400 pesos and up to 18,400 pesos per month, in addition to the pension for older adults,” he expressed. And he denied that his proposal would affect the Afores or violate the signed contracts.

He added that, as a result of the reforms to the law of 1997 and 2006, “great uncertainty was generated for 45 million workers who, for different reasons, have not been aware of their contributions to the Afores, so they run the risk of receiving meager pensions that are around 2,500 pesos.

”Mier Velazco argued in the project that currently only 30% of people over 65 years of age receive a pension, which leaves a large number of people economically vulnerable during their old age.

The initiative proposes to modify article 302 of the Social Security Law to establish the creation of a public trust, which will be established by the Ministry of Finance and Public Credit in the Bank of Mexico, to which resources will be transferred for the creation and administration of a pension fund.

Said pension fund will have a technical committee that must issue operating rules on the reception, administration, investment, deliveries and returns of resources to the IMSS. It is also stated that the fund’s resources will be permanently reinvested, so that they generate interest.

You might also be interested: “Morena presents initiative for the pension system; seeks to create public trust”

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