Sunday, October 1, 2023

IMSS and ISSSTE Pension: They warn of an increase in pension spending for 2024

Israel Macías, a researcher at the Universidad Panamericana, considers this issue to be a “time bomb” because income is not growing at the same rate as pension payments.

For the following year, an amount greater than one trillion 991 billion pesos in pensions and annuities, both provided by the Mexican Social Security Agency (IMSS) and the Institute for Security and Social Services of State Employees (EATS)among others, as well as those responsible for the Ministry of Welfare, which represents 22 out of 100 pesos of federal spending and that means an increase 11.8% compared to this year.

This increase is worrying for public finances, warn experts in the field. Israel Macias Lopez Academic at the Pan American University (HIGH)considers this topic a “Time Bomb” Since income does not grow at the same rate as pension payments, he sees a basic solution as a reduction in government spending, a tax reform or an increase in the retirement age, which would not be popular with the population.

“The government is running out of money, pension spending is growing rapidly and devouring the public budget.”

On his part Antonio Ruiz Porras Coordinator of the Doctorate in Economics at the University of Guadalajara (UdeG), agrees that the problem is worrying and alternatives need to be sought. “The main risk is that they have risen excessively in the last two years. Currently, the level of this spending exceeds the payments of the bureaucracy… it is perhaps the spending that has increased the most in the last decade.”

He adds that the increase in Mexican debt for the following year was due to pension spending. “It would not be surprising if this problem was the main concern of the new government, because it is an expense allocated to current spending, that is, in principle it could not be eliminated with any reform unless taxes increased.” or more “The requirements for granting pensions are strict.”

The data

Pension spending in 2024 (million pesos)
Contributing 1,499,038.6
Non-contributory pension for older adults 465,049
Non-contributory (pension for people with disabilities) 27,860
Total: 1,991,947.6
Nation World News Desk
Nation World News Desk
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