Starting from 2025, pensions for retirees under Mexico's IMSS Law 73 will undergo significant changes as they will be adjusted annually based on inflation rather than the minimum wage. This shift aims to protect the income of retirees from the impacts of rising prices, which have become increasingly pressing as costs of living continue to escalate.
The new policy means pensions will now be updated according to the inflation index calculated by the National Institute of Statistics and Geography (INEGI). For example, if the annual inflation rate is calculated at 4.5%, someone receiving 10,000 pesos monthly might see their pension increase by 450 pesos. One of the major beneficiaries of this update will be those who receive the Guaranteed Minimum Pension (Pensión Mínima Garantizada), which could see their amounts grow by as much as 12% under this new adjustment model.
This adjustment ties closely to anticipated increases to the minimum wage, which the National Minimum Wage Commission is expected to confirm toward the end of 2024. At present, the initiative aims to raise the minimum wage to cover 2.5 basic food baskets—a necessity noted by President Claudia Sheinbaum, who is focusing on ensuring equitable income for all workers.
According to government sources, pension adjustments will also result from how pensions have historically been calculated. The current pension increase takes effect in February annually and utilizes the value set for the Unidad de Medida y Actualización (UMA). The inflation figure reported for January is central to determining the percentage increase, and estimates for this year are forecasted to be between 4.5 and 5.0 percent. This news has been perceived negatively by some retired pensioners who currently receive amounts tied to outdated minimum wage figures.
Complications arise for retirees who ceased contributing to the pension fund before 2024. Individuals in this situation will not benefit from the widespread adjustments and will receive pension calculations based on the previous year's figures, particularly if they have not contributed more recently. This creates inequalities among pensioners, leaving earlier retirees, especially those from 2018 and earlier, with lower pension amounts due to historic low minimum wage levels.
Under the new guidelines, the Guaranteed Minimum Pension will be reinstated at 9,407 pesos, which includes adjustments for the 11 percent increase previously established by past administrations. The adjustment based on inflation could bring this figure close to 10,000 pesos, significantly improving the financial outlook for those who qualify.
It's important to note, for those planning to retire within the year, there remains confusion over eligibility for these new pension increases. Individuals who have not maintained contributions throughout 2024 and file for retirement within 2025 are cautioned; their final pension calculations will reflect previous salary calculations rather than the new rates.
Additional motivations for the government's focus on pension adjustments stem from recent landmark decisions made by the Supreme Court of Justice of the Nation (SCJN), which modified the approach to calculating pensions to favor adjustments based on current economic conditions rather than historical standards.
Specifically designated for those who registered with the IMSS before July 1, 1997, the Law 73 pension framework operates under two primary modalities: old-age pensions, available at age 65 and up; and unemployment pensions for those aged between 60-64 years. For both modalities, obtaining full pension benefits requires at least ten years of recorded employment, equaling about 500 weeks of contributions made to the IMSS.
Given these changes, retirees and future pension applicants must navigate the new system carefully to maximize their benefits and understand how inflation adjustments will alter their expected income. This reform not only aims to provide retirees with the security they desperately need but also reflects broader economic adjustments being made within Mexico’s social security framework.