Mexico’s President Andrés Manuel López Obrador has proposed a controversial measure to guarantee people pensions equal to their full salaries at the time of their retirement. This plan aims to set Lopez Obrador’s party, Morena, and its presidential candidate Claudia Sheinbaum, up for victory in the upcoming June 2 presidential elections, but may create unrealistic expectations and saddle the next president with high costs should the proposal come to pass. Despite the lack of support in Congress, López Obrador introduced a series of ambitious reforms, such as transferring the National Guard to the army and the elimination of government regulatory and oversight agencies.
The pension reform would have far-reaching implications for Mexico’s workforce, as two-thirds of the population is not currently covered by a pension program. Attempts to expand the Afore pension fund to achieve full-wage pensions for all workers would require significant increases in pension savings and program coverage. The introduction of these measures, despite unlikely success, seems aimed at establishing López Obrador’s legacy and vision for the next administration, and may also serve to attract votes for Morena in the upcoming elections.
It’s an election year, and the focus on pension reform seems to be driven by electoral considerations rather than feasibility. Despite its implications for the Mexican workforce, the proposed reforms are likely to face fierce resistance in Congress and raise critical questions about sustainability and long-term costs. López Obrador’s proposal raises doubts about the political feasibility of implementing such extensive reforms, but it sets the tone for the future administration and leaves an indelible mark on Mexico’s political landscape.