Observation (CEACR) - adopted 2000, published 89th ILC session (2001)

1.  The Committee notes with interest the particularly detailed information, including statistical data, provided by the Government in reply to its previous comments made following the coming into force in 1997 of the new legislation which associates the private sector with the achievement of the objectives pursued by the social security system. It also notes the discussion in the Committee on the Application of Standards at the 87th Session of the Conference (Geneva, 1999). Moreover, the Committee notes the observations made by the Confederation of Industrial Chambers of the United States of Mexico (CONCAMIN) on the application of the Convention, transmitted by the Government with its report.

The Committee wishes to draw the Government’s attention to and receive information on the following points.

Part II (Medical care).  The Committee notes that, in accordance with section 89 of the Social Security Act, the Mexican Social Security Institute (IMSS) may provide the medical assistance for which it is responsible according to the three following procedures: (i) directly, through its own personnel and facilities; (ii) indirectly, by means of agreements with other public or private providers of care; and (iii) indirectly, through the conclusion of agreements with enterprises with their own medical services. The Committee requests the Government to provide detailed information in its next report on the implementation in practice of section 89, points II and III, with an indication of the volume of medical care thus transferred (number of workers and enterprises concerned, overall cost of medical assistance, etc.). The Committee would also be grateful if the Government would provide additional information on the agreements concluded with other providers of care in the private sector, including with enterprises which have their own medical services, and particularly on the manner in which the protection envisaged in Part II of the Convention is ensured in such cases. Please also indicate whether private sector care providers may require the sharing by insured persons in the cost of medical care. Finally, the Committee would be grateful if the Government would provide examples of the agreements concluded under the terms of section 89, points II and III, of the Social Security Act.

Part V (Old-age benefit), Articles 28, 29 and 30 of the Convention.  1.  In its previous comments, the Committee noted that, for persons who fulfil the qualifying conditions for an old-age pension as set out in the legislation, the level of the pension is not determined in advance, but depends on the capital accumulated in the individual accounts of workers, and particularly the return obtained on such capital, which has to be entrusted to the management of a retirement fund administration company (AFORE) selected by the worker. However, under the terms of section 170 of the Social Security Act, the State guarantees workers who fulfil the age conditions and the qualifying period set out in section 162 of the Social Security Act with a "guaranteed pension", the amount of which is equivalent to the general minimum wage for the Federal District. In this respect, the Committee notes with interest, from the statistical information that it requested on the level of the "guaranteed pension", that the latter should attain the percentage prescribed by the Convention for a standard beneficiary, having recourse to Article 66 of the Convention. However, it would be grateful if the Government would indicate the manner in which the ordinary adult male labourer has been determined (Article 66, paragraphs 4 or 5). It would also be grateful if in future the Government would provide the statistics requested on the wage of the above labourer and on the old-age benefit on the same time basis, in accordance with Article 66, paragraph 2, of the Convention.

2.  (a)  The Committee would be grateful if the Government would provide detailed information in its next report on the various fees which may be charged by AFORES and SIEFORES (companies specializing in the investment of retirement funds), and by insurance companies, with an indication of the percentage represented by such fees in relation both to the capital accumulated in individual accounts and to pensions.

(b)  The Committee also requests the Government to provide detailed information on the methods used for the calculation of pensions by insurance companies, with an indication of the manner in which the life expectancy of pensioners is calculated and whether the old-age pensions paid to women workers are calculated on the same basis as those provided to male workers, and whether in particular different mortality tables are taken into account for each sex. Please also indicate whether insurance companies use their own mortality tables or tables established by the State.

3.  In its previous comments, the Committee drew the Government’s attention to Article 29, paragraph 2(a), of the Convention, which provides that a reduced old-age benefit shall be secured at least to a person protected who has completed, prior to the contingency, a qualifying period of 15 years of contribution or employment. In its report, the Government recalls that insured persons who do not meet the qualifying condition of 1,250 weeks of contributions set out in sections 154 and 162 of the Social Security Act at the time that they become entitled to old-age benefits, may either withdraw the balance of their individual account in one transaction, or continue to pay contributions to complete the missing weeks in order to qualify for a pension. It adds that, if the insured person has paid contributions for 750 weeks, she or he is entitled to benefits in kind under sickness and maternity insurance. The Committee notes this information, but wishes to draw the Government’s attention to the fact that neither the possibilities offered to insured persons under section 162 of the Social Security Act, nor the right to benefits in kind under sickness and maternity insurance, which is also granted to all pensioners under the terms of section 84 of the Act, can be considered sufficient to give effect to Article 29, paragraph 2, of the Convention. In these conditions, it hopes that the Government will be able to re-examine the situation and that it will indicate the measures which have been taken or are envisaged to secure a reduced periodical old-age benefit to a person protected who has completed, prior to the contingency, a qualifying period of 15 years of contribution or employment, in accordance with the provisions of the Convention on this point.

4.  In reply to the Committee’s previous comments concerning Article 30 of the Convention (payment of the benefit throughout the contingency), the Government states that, in relation to the "programmed retirement" method, as set out in section 159 of the Social Security Act, the beneficiary is entitled to be provided with a "guaranteed pension" once the capital accumulated in the individual account of the insured person has been exhausted. The Committee notes this information with interest.

Part XI (Standards to be complied with by periodical payments), Articles 65, paragraph 10, and 66, paragraph 8 (review of benefits).  The Committee notes the information provided by the Government on fluctuations in the cost-of-living index, earnings and benefits, which shows that, with the exception of survivors’ benefit, effect is given to these provisions of the Convention requiring the adjustment of long-term benefit for all contingencies. Indeed, according to the statistics provided, the increase in survivors’ benefit between 1 July 1997 and 30 May 2000 is far from following that of the general level of earnings and the cost of living since, according to the statistics provided by the Government, the increase is only 34.72 per cent for the average increase per beneficiary and 22.39 per cent for the increase in benefits for a standard beneficiary. The statistics provided show that, for the same period, the rise in the cost-of-living index was 47.23 per cent, while the earnings index rose by 59.10 per cent. The Committee would be grateful if the Government would re-examine the matter in the light of the above comments and hopes that the Government’s next report will contain information on the measures which have been taken or are envisaged to give better effect to Article 65, paragraph 10, of the Convention with regard to survivors’ benefit.

Part XIII (Common provisions), Article 71.  1.  Financing.  The Committee notes the information provided by the Government, and particularly the statistics on the financing of benefits. It recalls that the capital accumulated in individual accounts serves to finance all long-term benefits. It would be grateful if the Government would therefore indicate whether the statistics on the financing of benefits include the contributions of workers and employers to the individual accounts referred to in sections 191 and 192 of the Social Security Act.

The Committee also requests the Government to indicate the manner in which effect is given to Article 71, paragraph 2, of the Convention with regard to employment injury benefit, in view of the fact that the capital accumulated in the individual accounts of workers contributes to the financing of these benefits under the terms of sections 58 and 64 of the Social Security Act.

2.  Administration and control of the social security system (Articles 71, paragraph 3, and 72, paragraph 1).  The Committee notes the information provided by the Government in its report. In particular, it notes that the financial and actuarial report of the Mexican Social Security Institute for 1999 is currently under discussion, in accordance with section 260 of the Social Security Act. The Committee requests the Government to provide a copy of this report when it has been adopted.

Furthermore, the Committee considers it particularly necessary, to enable the Government to take the measures required to give full effect to Article 71, paragraph 3, that a global actuarial evaluation be undertaken of the whole of the system, including the various pension schemes which includes and recapitulates the debts and commitments of the State arising out of both the former and the new social security systems and which includes the proportion represented by the IMSS, the INFONAVIT and the SAR in such financing and commitments. It requests the Government to indicate whether such an evaluation exists and, if so, to provide a copy of it.

3.  Participation of persons protected in the management of schemes (Article 72, paragraph 1).  In reply to the Committee’s comments, the Government indicates that, in accordance with sections 29 and 49 of the Retirement Savings Act, the AFORES and the SIEFORES must be administered by an executive board which includes at least two independent advisers, who represent the interests of the workers. However, the Committee notes that, although sections 29 and 49 of the above Act indeed refer to independent advisers, they do not establish that these must be advisers representing the interests of the workers. In these conditions, the Committee would be grateful if the Government would indicate the relevant legal provisions, administrative measures or regulations.

The Committee would also be grateful if the Government would indicate the manner in which the representatives of the persons protected participate in the management of insurance companies which intervene when workers take their retirement and which therefore form an integral part of the social security system.