LatinNews Daily - 11 December 2020

* Mexico’s federal chamber of deputies has given final approval to a pension reform bill. The bill promoted by private sector organisations seeks to increase pension pay-outs and offer more benefits to workers. It reduces the number of weeks workers must contribute to their mandatory individual pension funds before they can legally retire to 1,000 weeks from 1,250 weeks; increases the contributions that employers must make to employee’s pension funds from 6.5% to 15%; and sets a cap of 0.54% on how much commission the private fund administrators (Afores) that manage individual pension funds can charge. The approval of the reform was celebrated by President Andrés Manuel López Obrador, who said that it would allow more workers to retire with a pension and to receive higher pensions. However, the setting of a cap on commissions has been criticised on the grounds that it will undermine competition between the Afores, which will have little incentive to offer lower commissions to customers.  

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