Observation (CEACR) - adopted 2011, published 101st ILC session (2012)

Social Security (Minimum Standards) Convention, 1952 (No. 102) - Mexico (Ratification: 1961)

The Committee notes the Government’s detailed report received in October 2011, which contains information requested under Parts I and III to VI of the report form on the Convention adopted by the ILO Governing Body, as well as a partial reply to the Committee’s previous observation. This information concerns exclusively the application of the Act on the State Workers’ Social Security and Services Institute (ISSSTE). With regard to Part II of the report form, the Committee observes that, while the last sentence of the report indicates that information on the application by ISSSTE of each of the corresponding articles of the Convention is given under Part II of the report form, this part of the Government’s report has not been received by the Office. The Committee therefore hopes that the Government will not fail to supply this information as soon as possible. It wishes to remind the Government in this respect that the detailed report should not be confined to only one piece of legislation, as the ISSSTE Act in this case, but should cover all national legislation giving effect to the Parts of the Convention accepted by Mexico (Parts II, III, V, VI and VIII to X). The Committee expects to receive such a comprehensive report before 1 September 2012.

With respect to Parts III and V of the report form which ask about enforcement, inspection and the difficulties encountered in the application of the Convention in practice, the Government informs that in the period from 1 June 2008 through 31 March 2011, 138,728 labour inspections have been carried out nationwide in 80,284 places of work without detecting any violations or workers’ complaints relating to the subject matter of Convention No. 102 of the ILO, which covers 9,251,838 workers in Mexico. In the light of this information, the Committee would like to know whether the Government sees no difficulties and is generally satisfied as to how the Convention is applied in practice. From its side, the Committee observes a great disparity between the high number of the workers’ complaints dealt with by the judiciary bodies and the zero number of violations registered by the labour inspection. Recalling that Mexico has not ratified the Labour Inspection Convention, 1947 (No. 81), the Committee asks the Government to specify whether its labour inspection services have the legal competence to supervise the application of the social security legislation and, in particular, pension insurance. Please also supply information on the organization and working of the inspection in social security, as requested in Part III of the report form.

With respect to Part IV of the report form which asks for information on court decisions involving questions of principle relating to the application of the Convention, the Government refers to 42 jurisprudential criteria of the Supreme National Court of Justice (SCJN) concerning constitutional complaints (amparos constitucionales) and 23 decisions of other national tribunals concerning only the ISSSTE. The Committee would like to know whether in the reporting period of 2006–11 the national courts of law have rendered decisions of principle concerning other branches of the Mexican social security system. As regards the decision of the national tribunals concerning ISSSTE, the report specifies that they have not led to any modification of this Act. In terms of legislative implications of the decisions taken by the SCJN, the Government states that the declaration of unconstitutionality of certain provisions of the ISSSTE Act does not affect the nature and operation of the pension system established by it. In relation to the judgments rendered by the SCJN whereby articles 25, second and third paragraphs, 60, last paragraph, 136, 251 and Tenth Transitional Provision of the ISSSTE Act were found to be unconstitutional, the Government reports that the SCJN observed that the authorities responsible for the implementation of the said Act should take into account its interpretation of these provisions regarding the system chosen by the employee (the new system of individual accounts or the previous pension system), and that when dealing with claimants’ cases these authorities should refrain from implementing the provisions declared unconstitutional until they are repealed or amended. For this purpose, the competent authorities shall take the necessary measures to ensure that all authorities, which, by reason of their functions, are responsible for the enforcement of the judgments upholding the protection of claimants’ rights, shall be aware of decisions of the SCJN regarding the scope of the provisions of the ISSSTE Act and the persons covered by them. The Committee would like the Government to explain what measures have been taken by the competent authorities to that end.

The Committee thanks the Government for maintaining an active dialogue with the trade unions, having considered every aspect of the observations submitted by the various trade union organizations mentioned in the Committee’s previous comments. It notes that many of the questions raised by the trade unions concerning ISSSTE Act have been the subject of the jurisprudential criteria of the SCJN referred to above. In particular, in connection with the allegation made by the unions that there were irregularities during the approval process of the ISSSTE Act, the Federal Legislative Power considered that both the form and mechanisms were fully in conformity with the legislation: the SCJN also found that there were no flaws in the legislative process, and that the law contained the required preliminary recitals. Regarding the allegation that the new system introduced by the ISSSTE Act involves the privatization of the social security system, the SCJN concluded that this situation is not tantamount to the privatization of the regime, given that this is a process whereby services previously monopolized by the State are now freely rendered by individuals, and that the fact that the old-age benefits agency (Pensionissste) is authorized to invest the resources of individual accounts, which never cease to be owned by workers, in order to obtain higher returns, does not imply, in any way, a privatization. In this regard, the Government asserts that regardless of the use Pensionissste makes of the funds contained in the individual accounts of workers, this agency shall always bear responsibility for them in accordance with the ISSSTE Act. The Committee further notes that the report refers to additional replies to the workers’ questions concerning the ISSSTE given under each Article of the Convention in Part II of the report form, which has not been received.

In August 2011, new comments on the application of the Convention were forwarded by the Revolutionary Confederation of Workers and Agricultural Labourers (CROC) and the “Vanguardia Obrera” Federation of Workers (FTVO), affiliated to the CROC in relation to domestic workers. In September 2011, the Trade Union Delegation of ‘Radio Education’ (SNTE) and the National Union of Workers (UNT) also submitted comments on the ISSSTE Act and, in October 2011, the Union of Masons, Assistants and General Related-Construction Activities and Private Companies presented comments on issues relating to old-age benefits. The Committee hopes that the Government will reply to these new comments of the workers’ organizations in 2012. Finally, the Committee took note of the Government’s explanations provided in reply to the communication, dated 22 February 2010, from the Trade Union of Telephonists of the Mexican Republic concerning the situation of the AVON company workers.

Furthermore, the Committee notes that the Government’s report does not reply to the questions raised in its previous observation concerning certainty as to the level and sustainability of benefits, which read as follows:

In its previous observation, the Committee pointed out that the reform of the ISSSTE made it necessary to conduct an overall actuarial valuation of the entire social security system to ensure the financial equilibrium of the new system, which should henceforth include the part corresponding to the ISSSTE scheme, and asked the Government to indicate whether such a valuation has been carried out and, if so, to provide the results thereof. The Government’s report of 2008 has not provided the information requested, indicating that the information processing systems of the two social security institutions – ISSSTE and IMSS – are in the process of coordination. In the meantime, the managing board of the ISSSTE has approved the actuarial report for 2008, which concludes that in the period 2008–13 the resources available to the Institute would on average cover only 88 per cent of the total cost of benefits it would have to deliver under the new law. The Committee asks the Government to supply a copy of this report and to indicate measures taken or envisaged by the Government to make up the deficit and ensure the due provision of benefits under the ISSSTE scheme.

Taking into account that the reform of the state workers’ scheme necessitated transfer to the ISSSTE of the social security funds from the general scheme (IMSS), the Committee once again stresses the importance of an actuarial evaluation of the entire social security system, which should cover the various pension schemes recapitulating at a specific evaluation date the fixed and contingent liabilities, as well as all the debts and commitments of the State deriving from the old and the new social security systems. Indeed, only an overall actuarial valuation of the entire system will make it possible to estimate the contingent deficits to be underwritten by the State and to make the corresponding forecasts. The Committee accordingly asks the Government to take the necessary measures to conduct such an actuarial study, as required by Article 71(3) of the Convention.

With regard to the question of the level of benefits, which the Committee has been addressing to the Government in its previous comments under Part XI of the Convention (Standards to be complied with by periodical payments), in the fully funded defined contributions scheme the amount of the pension is not determined in advance but depends on the capital saved in the workers’ personal accounts and on the return thereon. The Committee therefore requests the Government to explain, with reference to the relevant actuarial forecasts, what replacement level the ISSSTE scheme aims to achieve after 30 years of contributions and whether the replacement level of 40 per cent required by the Convention would be attained for the standard beneficiary.

Pursuant to section 92 of the ISSSTE Act, for workers meeting the requirements on age and qualifying period laid down in section 89 of the Act, the State provides a “guaranteed pension” in a monthly amount of 3,034.20 pesos. The Government indicated in its report of 2008 that this amount represents the double of the minimum pension level established by the Convention and that the amount of the average pension equalled four minimum wages and was four times higher than the Convention’s minimum. The Committee noted this information but did not find in the Government’s report the statistical information requested in its previous observation under Article 66 of the Convention, to enable the Committee to ascertain whether the minimum amount of the old-age pension attains the percentage prescribed by the Convention. The Committee asks the Government to substantiate the above statements by comparing the amount of the guaranteed pension with the reference wage of an ordinary adult male labourer, as required in the report form under Article 66 of the Convention.

In the general IMSS scheme, under section 170 of the Social Security Act, the State guarantees to workers who fulfil the age conditions and qualifying periods set out in section 162 of the Social Security Act, the provision of a “guaranteed pension”, the amount of which is equal to the general minimum wage for the Federal District. According to the statistics provided previously by the Government, the amount of the minimum guaranteed pension for 2006 attained 42.95 per cent of the wage of an ordinary adult male labourer selected in accordance with the provisions of Article 66 of the Convention. The Committee wishes the Government to explain the difference between the guaranteed pension under the ISSSTE, which, according to the Government, represents double the minimum pension level established by the Convention, and the guaranteed pension of the IMSS, which is scarcely above this minimum.

The Committee notes in this respect that, according to the trade unions’ observation of 2007, neither the guaranteed pension under section 92 of the ISSSTE, nor the old age and invalidity pensions under sections 91, 121 and 139 of the ISSSTE ensured the replacement level of 40 per cent required by the Convention. Referring to the Government’s reply to the trade unions’ observation, the Committee observes that in contesting these allegations the Government does not refer to any statistical data and seems to confuse the general minimum wage for the Federal District with the wage of an ordinary adult male labourer, which should be used as the reference wage for measuring the replacement level of the guaranteed pensions. The Committee therefore once again asks the Government in its next detailed report due in 2012 to provide the statistical information requested by the report form under Article 66 of the Convention (Titles I, II and IV). It also asks the Government to indicate whether the guaranteed pension also applies to the pension arising out of death and, if so, under which provisions.

[The Government is asked to report in detail in 2012.]