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

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A Government representative of Mexico, in response to the request for clarification and statistical data on the application in practice of the new Social Security Act, which had come into force in July 1997, and the Act respecting retirement saving systems of April 1996, stated that he had not expected his delegation to be invited this year to provide the Conference Committee with information that the Committee of Experts had requested for the year 2000. However, in view of the constant desire of the Government of Mexico to collaborate fully with the ILO, a group of experts had been established to provide the available information in reply to the comments made by the Committee of Experts.

One of the aforementioned experts provided the clarification requested by the Committee of Experts. With regard to the level and duration of benefit, he stated that section 28 of the Social Security Act established a ceiling for the wage subject to contributions, which was set at 25 times the general minimum wage in force in the federal district. With regard to the level of the cash benefit provided under the sickness and maternity (allowances) branch, in accordance with section 98 of the Act, the level was 60 per cent of the last daily wage subject to contributions in the sickness branch, and 100 per cent of the above wage in the maternity branch, as set out in section 101 of the Act.

With reference to old-age benefit, in response to the question raised by the Committee of Experts as to whether in practice the minimum level of the old-age pension attained the percentage prescribed in Article 66 of the Convention, he stated that under the applicable legal provisions, and from the experience of over 1,075 old-age pensions which had been awarded under the new Social Security Act, their level was 40 per cent of the wage subject to contributions over the last years for a model beneficiary who fulfilled the conditions relating to age and qualifying period. This level was guaranteed throughout the life of the retired person and, up to now, no retired person had requested to be affiliated to the programmed retirement system.

In relation to the request made by the Committee of Experts for the Government to indicate the manner in which the application of Article 30 was guaranteed (throughout the duration of the contingency) under the programmed retirement scheme, and whether the beneficiary was entitled to receive the "guaranteed pension" envisaged in section 170 of the Social Security Act when the capital accumulated in the individual account was exhausted, he stated that in the event of the exhaustion of the resources in an individual account of a beneficiary of a pension who had opted for the programmed retirement scheme, the retirement fund administration company would notify the Mexican Social Security Institute so that it could continue providing the guaranteed minimum pension. This meant that, once the resources had been exhausted, the pension would be covered directly by the Institute through the funds allocated for that purpose by the federal Government, in accordance with section 172(3) and (4) of the Social Security Act.

Concerning the request for the Government to indicate the manner in which a reduced old-age benefit was provided, in accordance with Article 29, paragraph 2, of the Convention, he stated that section 154 of the Social Security Act provided that workers who retired at the age of 60 years or over and who had not fulfilled the required 1,250 weeks of contribution could withdraw the balance from their individual account or continue paying contributions until they had completed the necessary number of weeks to be entitled to a pension. In this case, provided the insured person had paid precisely the minimum level of contributions set out in Article 29, paragraph 2(a), of the Convention (750 weeks), she or he would be entitled to the benefits in kind under the sickness and maternity branch, which were equivalent to a reduced old-age benefit.

Concerning the industrial injury benefit, invalidity benefit and survivors' benefit covered by Articles 56, 57, 62 and 63 of the Convention, he stated that the invalidity pension for workers who had fulfilled the qualifying conditions set out in section 122 was equivalent on average to 35 per cent of the wages paid over the 500 previous weeks since, as pointed out by the Committee of Experts, this benefit, which could be supplemented by family allowances, was paid to all pensioners and was equivalent to: 15 per cent of the level of the pension for the spouse or common-law wife of the pensioner; 10 per cent for each of the pensioner's children under the age of 16 years; in the event that the pensioner had no spouse, common-law wife or children under 16 years, an allowance equivalent to 10 per cent was provided to each of the pensioner's economically dependent parents; in the event that the pensioner did not have a spouse, common-law wife, children or parents, an assistance benefit equivalent to 15 per cent of the level of the pension was provided; or, in the case that the pensioner only had an older relative, an assistance benefit equivalent to 10 per cent of the pension was provided. All of these measures were based on section 138 of the Social Security Act. The level of 15 per cent of the pension was equivalent to 5.25 per cent of the percentage which served as a basis for the calculation of the pension, while 10 per cent of the pension was equivalent to 3.5 per cent of that percentage. This meant that a pensioner with a wife and a child would receive a pension equivalent to 43.7 per cent of the pensionable wage, which was clearly above the 40 per cent figure referred to by the Committee of Experts. In other terms, the invalidity pensions provided in accordance with the new Act would, as a minimum, amount to 43.7 per cent for the average pensioner, and in no event less than 40.25 per cent of the average wage over the last 500 weeks of contributions.

Turning to the surviving spouse and orphans' pension provided to a model survivor (a surviving spouse with two children) of an insured person or a retired person who died due to a cause which was not related to an occupational risk, he emphasized that the level of the pension was never lower than the 40 per cent set out in the Convention, as illustrated by the following data: the widow's pension was 31.5 per cent of the pensionable wage; the pension for a child was 7.0 per cent of the pensionable wage; and the pension for a second child was 7.0 per cent of the pensionable wage. The total was 45.5 per cent of the pensionable wage. All these measures were based on sections 131 and 135 of the Social Security Act.

With regard to pensions provided as a result of an employment injury (occupational diseases and work-related accidents), he stated that, under the terms of section 58(II), in the event of total permanent incapacity, the insured person would receive a definitive monthly pension equivalent to 70 per cent of the wage on which contributions were being paid.

Turning to the manner in which long-term benefits were adjusted to the cost of living or the general level of wages, he indicated that specific information would be included in the report which would be submitted in the year 2000 on the application of Article 65 which would include, in addition to fluctuations in the cost of living, any changes in the general level of incomes, as well as changes in the level of benefits (average per beneficiary and for a model beneficiary), as well as changes in minimum benefits.

With regard to the financing of benefits, he stated that the statistics requested in the report form, in compliance with Article 71, point 3, would be provided in the report to be submitted in the year 2000.

On the subject of the administration of the social security system, he indicated that the Social Security Institute undertook and submitted annually to its Technical Adviser and General Assembly its Financial and actuarial report, which contained the appropriate actuarial calculations for each branch of insurance and studies on their financial viability.

On the subject of the participation in their administration of the persons protected by the schemes, he informed the Committee that both AFORES (Society for the Administration of Pension Funds) and SIEFORES (Specialized Company for Pension Fund Investment) were governed by an administrative council with the participation of at least two independent advisers representing the interests of workers who had opted for the AFORE for the management of their individual account or for the specific AFORE administered by the corresponding SIEFORE. Such advisers were not permitted to have financial links with the AFORE or the SIEFORE, nor to work with any of their shareholders, and had to fulfil the requirements set out in the Act respecting retirement savings systems. Independent advisers were an important factor in supervising the resources entrusted by workers to AFORES or invested in SIEFORES, since their votes were required to approve the self-management programmes of AFORES and the contracts concluded by them.

After stating that the report which was being prepared would include all the statistical information requested in the report form (Article 76, paragraph 1(b)(I)), he stated that, with regard to the application of the transitional provisions which had been adopted covering persons who were already insured under the Mexican Social Security Institute, before the coming into force of the new Social Security Act, the Act of 1973 had not been withdrawn completely (it had not been repealed) upon the adoption of the new Act, but had simply been derogated (had partially lost its force of law) in order to safeguard the acquired rights of insured persons under the previous Act (particularly with regard to pensions). As a result, workers who fulfilled the requirements set out by either the former Act or the new Act, as appropriate, could have recourse to the Institute for the calculation of the level of their pension, under the terms of both the 1973 Act and the 1997 Act. It was for the individual worker to decide to draw a pension in the event of old age or retirement at an advanced age under the terms of the Act, which was the most advantageous.

He added that, in order to ensure the readjustment of old-age, invalidity and survivors' benefits, as well as the benefits paid in the event of employment injury and those provided under the 1973 Act, in conformity with Article 65(10), of the Convention, the same Act was applicable and established that they rose by the same percentage on the same dates as increases in the general minimum wage in the federal district.

He hoped that he had removed any doubts as to compliance with Convention No. 102 by Mexico.

The Worker members expressed their gratitude to the Government representatives for the information provided, the good will shown and the desire to continue to cooperate with the ILO. The Worker members had proposed discussing the case of Mexico in relation to the Convention for three reasons. First, they did not want to restrict the discussion within the Committee to the fundamental and priority Conventions only. The application of Conventions of a technical nature was important to the daily lives of workers, the unemployed and their families. Moreover, the Committee should be concerned with new developments and trends in social policy and practice, in respect of international Conventions. They pointed out that national authorities did not always take account of the objectives and guiding principles of international standards. Second, the ILO's supervisory system also served a preventive function. There was no need to wait several years to indicate and discuss problems which arose in the application of Conventions. The Convention had been drawn up to ensure a degree of flexibility and left significant room for manoeuvre at the national level to take account of the different levels of development, and the differences in the conception, financing and management of the social security system. Nevertheless, this Convention had the clear objective of establishing minimum standards which should be respected, irrespective of the social security system in place. Third, important changes have been made to the retirement pension systems and social security in general, particularly in Latin America, with the introduction of individual savings accounts, investment funds and the rejection or weakening of national systems. Although it may be true to say that the manner in which reforms had been implemented may differ from country to country, there were nevertheless similarities. The present Committee had noted that, in certain cases, problems in applying the Convention had arisen. It emphasized that all retirement systems, irrespective of whether they were private, public or a combination of both, should respect minimum standards in order to ensure credibility on the scale of contributions, pensions, the number of workers protected and the management and methods of application.

The Mexican social security system had recently been reformed and the Government did not always have available all the necessary information to determine whether the system complied with minimum standards. However, in taking account of the importance of these reforms, which significantly changed the concept and functioning of the system, the Worker members were seeking assurance that the system complied with these standards. They had already indicated that a number of the provisions of the new Social Security Act of 1 July 1997 did not appear to be in compliance with the Convention. The Committee of Experts referred to article 162 of this Act which laid down a considerable qualifying period of contribution (24 years) to become entitled to an old-age pension; Article 29(2) of the Convention laid down a reduced benefit for a worker who had contributed for a period of 15 years. The Committee of Experts also referred to articles 141, 131, 135 and 144 of the Act concerning invalidity pensions and survivors' pensions, which provided that the level of pensions be limited to 35 per cent of the previous average wage, whereas the provisions of the Convention required that the level of pension be at least 40 per cent of the previous earnings. The Government representative provided information on this and other points. The totality of the information and statistics provided would be examined by the Committee of Experts.

Finally, the Committee of Experts had noted that the legislative texts in their present form did not give clear indications as to their conformity with the principles and minimum levels laid down in the Convention. The questions concerning the level of old-age pension did not appear to be established in advance but were subject to the accumulated capital in individual accounts, whereas the Convention laid down the level of minimum pensions; the consequences for the beneficiary when the accumulated capital in the individual account had been exhausted taking into consideration that Article 30 of the Convention provides that the pension should be paid throughout the beneficiary's lifetime; the indexing of pensions and other allowances to take account of increases in the cost of living as provided for in Article 65(10), of the Convention; the guarantees as regards the financing of the system: in particular, how would pensions be paid in the event of a financial and economic crisis or difficulties facing the pension fund investment companies (SIEFORES and AFORES); the guarantees regarding the supervision and administration of pension funds and investment funds; and, finally, the manner in which workers would participate in the administration of the system. The Government representative had responded to the questions raised and these responses would be examined in depth by the Committee of Experts.

The Worker members had received negative echoes from several trade union organizations operating in different sectors and enterprises. Moreover, the Committee of Experts referred to a communication dated June 1997 from various trade union organizations expressing concerns of a fundamental nature. Concerns had also been expressed with regard to the health care system, also covered by the Convention. The Worker members had also raised questions with regard to the guarantees concerning solidarity amongst the generations, the level of pensions in the event of chronic illness, the consequences of this new system on workers who were already members of the Mexican Social Security Institute when the new Act took effect. They requested the Government, as indicated by the Government representative, to provide detailed information including actuarial calculations and statistics to enable the Committee of Experts to analyse the existing situation in its entirety. They also requested the Government to ensure that its legislation fully complied with the Convention and, where appropriate, to adopt the necessary amendments.

The Employer members thanked the Government representative for the comprehensive oral information covering a difficult technical field. Despite the short notice, the information had been of an exemplary nature. Significant new measures had been adopted in the country recently, including new legislation in both 1996 and 1997. The Employer members fully understood the concern of workers that the new social security system might have the effect, not of improving, but of worsening the situation. The Government representative had not been able to provide detailed information as yet. Indeed, the situation in Mexico needed to be examined in the context of the measures which were being taken in other countries, particularly in the Latin American region. Traditional social security systems were being reorganized. This was occurring because they had been found to be inadequate. The old systems had not been able to meet their obligations or achieve their objectives of providing benefits in cases of social need. The benefits they provided did not constitute adequate social guarantees and their level was decreasing. The reason for the restructuring was to replace or supplement the former system, which was normally a public system, by the private provision of benefits. In the case of Mexico, which was organized on the basis of the federal State, the system was not completely private and guarantees were provided by the State for the provision of minimum benefits.

The Employer members recalled that the Convention had been adopted in 1952 when many of these developments had not even been imagined. Social security at that time had only consisted of state-run systems. More recently changes had been introduced in many countries. Even in a country which was associated with the first introduction of certain types of social security, particularly as a result of measures taken by Bismark, far-reaching changes were being discussed. In the case of Mexico, there was concern in some quarters about the effect that the changes would have on the benefits provided and there was a fear that the situation might worsen. The Convention contained provisions concerning minimum benefits, but it did not cover situations in which the benefit system changed. The question was therefore whether the respective minimum standards were guaranteed by the new system. A number of very technical questions had been raised by the Committee of Experts. The fact that one Government member had stated that he would not be capable of participating in a technical discussion of this nature at such short notice merely served to emphasize the value of the information which had been provided orally by the Government representative.

Nowhere in its report did the Committee of Experts express the view that the Convention was being violated by Mexico. What was at question was the effect of the new system. Many of the questions asked by the Committee of Experts could only be answered by the provision of statistical data. However, the law was very recent and in order to obtain the necessary perspective, it would be necessary to compile data over several years. The questions raised by the Committee of Experts concerned the nature of the benefits provided in such branches as sickness and maternity, as well as whether the levels of benefit provided were in accordance with Article 66 of the Convention. The Committee of Experts had requested information on the level of old-age pensions and whether there was a ceiling to benefits. One of the doubts which arose was how a pension could be calculated in advance if it was based on capital accumulation and how the Government was complying with its obligation to guarantee a minimum pension calculated in relation to minimum wages. Another question concerned the calculation of benefits payable in the event of occupational accidents and diseases. A final series of questions concerned the management of the new system and the participation of workers and insured persons. The answers to these questions, when they were received, would be examined by the Office and the Committee of Experts. If at a later stage the case were mentioned once again in the report of the Committee of Experts, the Conference Committee would have to decide whether it should be re-examined. In the meantime, in its conclusions, the Conference Committee should confine itself to requesting the Government to provide information in reply to the questions raised by the Committee of Experts.

The Employer member of Mexico stated that the new Mexican Social Security Act, which had been developed through dialogue between the sectors of production, with the Government acting as an intermediary to guide the participants, and with the assistance of distinguished academics, was at the stage of its initial application. It would be necessary to wait until after its application to know its most important effects.

He stated that the general decision to develop these new regulations had been taken as a result of a pressing need, since the traditional concepts had become obsolete. The dynamism of social security required greater progress in protection measures.

He emphasized that the employers' movement, which participated actively in the governing bodies of the Mexican Social Security Institute, were totally convinced that its tripartite structures provided the most democratic form for their intervention as social partners. He believed that the transformation of Mexican social security, as embodied in its new legal framework, represented a step forward in protecting the rights of insured workers and their dependants. Nevertheless, it should not be forgotten that financial benefits, which took the practical form of pensions, would have effects on future generations. He explained that care had been taken to respect the acquired rights of all insured persons covered by the previous system, who would have the option of deciding upon the application of either Act, whichever was most beneficial to them.

He expressed his conviction that the report requested by the Committee of Experts for the year 2000 would be submitted in time and would include the respective statistics, as well as information on the insured population. Finally, he reaffirmed that the above Act gave effect to the requirements of international social security in a positive and satisfactory manner.

The Worker member of Brazil stated that the comments made by the Committee of Experts concerning the application of the new Social Security Act in Mexico were a cause of great concern. The Convention was one of the most important in the ILO, since it covered not only retirement benefits, but also and in particular the other benefits and guarantees provided by social security. Security was undoubtedly one of the most important guarantees for workers throughout their careers against all the contingencies which might arise in relation to work. With regard to sickness and maternity benefits, he shared the concerns expressed by the Committee of Experts. It was unclear whether these benefits would be decreased by the placement of a ceiling on the wage which was subject to contributions and on the level of sickness and maternity benefits. Another concern expressed by the Committee of Experts concerned the form in which the old-age pension would be guaranteed in the new system and the guarantees set out in Article 29, paragraph 2(a), of the Convention respecting the right to receive benefits after 15 years of contributions. It was still unclear whether the Mexican legislation was in conformity with the Convention: however, to him it appeared that it was not.

He referred to the invalidity and survivors' pension, the level and scope of which appeared to be in contradiction with the requirements of the Convention. He called upon the Government of Mexico to make the necessary changes to its legislation to bring it into harmony with the Convention. Finally, he warned that, although the Mexican Government considered that privatization would provide a solution to its problems, it could not be achieved by violating the minimum rights set out in the Convention.

The Government representative stated that the concerns expressed by the Employers and Workers were implicit in the presentation by another Government delegate. He then drew attention to the total consistency of the legislation with the Convention. Regarding the doubts relating to calculations or acquired rights, both the other Government delegate and the Employer member of Mexico had dealt with the issue clearly. Lastly, he indicated that the comments made would be taken into account when preparing the detailed report to be presented to the Committee by the Government.

The other Government delegate welcomed the observations made by the Worker and Employer members and emphasized that, in fulfilment of the commitments to the ILO, during the whole process of drafting the Act, special care had been taken to ensure that its provisions were in conformity with the Convention. The Act had only been in force for two years, so it was too early to expect final data. The statistical reports validating the statements made at the meeting would be provided. Concerning the statement by the Worker members, he said that as they did not have a copy of his presentation some of the details might have escaped them and he, therefore, requested that the text be circulated. Lastly, he strongly emphasized that the Act was not contrary to the Convention.

The Committee thanked the Government representatives for their very detailed oral information and took note with interest of the discussion which followed. It noted the recent reforms undertaken by the Government in its social security system. In view of the great complexity of the issues raised and of the highly technical nature of the information supplied by the Government representatives, the Committee considered that such information should first be considered by the Committee of Experts. It also welcomed the promise by the Government representative that the Government would send a detailed report in the year 2000 containing full information, including statistical data, on all the points raised in the observation of the Committee of Experts.

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In order to provide a comprehensive view of the issues related to the application of ratified Conventions on social security, the Committee considers it appropriate to examine Conventions Nos 17 (workers’ compensation, accidents), 102 (social security, minimum standards) and 118 (equality of treatment, social security) together .

Article 2 of Convention No. 17. Coverage of workers for occupational accidents. (i) Coverage of apprentices. The Committee notes the information provided by the Government in response to its previous comment, in which the Committee requested the Government to explain how persons working in an enterprise or institution within the framework of vocational training were protected, in law and in practice, in the event of an employment accident, in accordance with the Convention.

The Committee notes the Government’s indication in its report that the Federal Labour Act provides for a legal status similar to that of apprenticeship, called “recruitment for initial training”, through which workers acquire the knowledge or skills needed to perform the activity for which they may be recruited. The maximum duration of initial training is three months, with the possibility of extension to six months in higher posts, and a written employment contract must be issued to ensure the worker’s social security coverage. The Committee notes that the Act also provides for an additional trial period of 30 to 80 days, enabling the worker to benefit from social security coverage during that period. Finally, the Committee notes that the Political Constitution of the United States of Mexico provides, in Article 123(A), that employers shall pay the compensation arising from employment accidents and occupational diseases of workers, irrespective of the occupational category of the workers. The Committee takes due note of this information.

(ii) Coverage of certain workers in the public sector for employment accidents. In its previous comments, the Committee requested the Government to provide statistical data on the number of public sector workers who are not covered by employment accident insurance, and to take the measures necessary to include these categories of workers in the compulsory social security system, including in the event of employment accidents. In this regard, the Committee takes note of the Government’s reply, indicating that in the first quarter of 2016, out of almost 5 million public sector workers, 670,688 persons, equivalent to 13.6 per cent of workers, did not have access to social security. The Committee recalls that Article 2 of the Convention provides that the laws and regulations as to workers’ compensation for industrial accidents shall apply to workers, employees and apprentices employed by any enterprise, undertaking or establishment of whatsoever nature, whether public or private. The Committee therefore requests the Government to take the necessary measures to ensure compensation for all victims of industrial accidents covered by the Convention, or their dependants, in conformity with the Convention. The Committee also requests the Government to provide information on any measure taken or envisaged in this regard.

Article 5 of Convention No. 17. Employment accident compensation paid in the form of a lump sum. In its previous comment the Committee noted that under section 58(III)(3) of the Social Insurance Act (LSS) of 1995, when the rate of permanent partial incapacity is between 25 and 50 per cent, an insured person may choose between the payment of either a pension or a lump sum, and requested the Government to take the necessary measures to comply with Article 5 of the Convention. The Committee notes the Government’s response, confirming that the payment of a lump sum in lieu of a pension is not in compliance with the substantive principle of the protection of insured persons set out in the Political Constitution of the United States of Mexico. In practice, the beneficiary might not put aside sums for habitual medical services, nor foresee the extent of his or her expenses, thus placing the objective of the compensation in jeopardy.

In view of the above, and observing the absence of sufficient guarantees for the competent authority to be satisfied that the lump sum be properly utilized, the Committee considers that the condition set out in Article 5 of Convention No. 17 for the compensation to be paid in the form of a lump sum instead of a periodical payment is not met. The Committee therefore requests the Government to take the necessary measures to give effect to this provision of the Convention, and to provide information on the measures taken or envisaged in this regard.

Article 8 of Convention No. 17. Procedure for reviewing the degree of incapacity. The Committee notes the information provided by the Government on the provisions on reviewing the degree of incapacity after a period of two years contained in section 60 of the LSS.

Article 10 of Convention No. 17. Normal wear and tear of artificial limbs and surgical appliances. In its previous comments, the Committee requested the Government to indicate the manner in which the right of victims of occupational accidents to the renewal of artificial limbs and surgical appliances following normal wear and tear was implemented in practice. The Committee notes the Government’s indication that the LSS provides for the supply of artificial limbs and surgical appliances, and that the medical and administrative policies and activities that the personnel of the Mexican Institute of Social Security (IMSS) must apply are set out in the Procedure for the provision or repair of artificial limbs, surgical appliances and functional aids to insured patients in the physical medicine and rehabilitation services and units of the IMSS (2680-A03-002). The Committee also observes that section 61 of the Act on the ISSSTE of 2007 envisages the provision in kind of prosthetic and orthopaedic appliances. The Committee requests the Government to indicate the laws or regulations that provide for the right to the normal renewal of artificial limbs and surgical appliances for workers affiliated to the ISSSTE and for other workers protected by the Convention.

Article 11 of Convention No. 17. Guarantees in the event of the insolvency of the insurer. In its previous comments, the Committee requested the Government to indicate how the payment of compensation for occupational accidents is guaranteed in the event of the insolvency of the insurer, despite preventive measures; whether mechanisms have been established to protect workers’ claims in the event of the insolvency or dissolution of insurers; and to what extent and in what manner the State could intervene to take the place of insurers to compensate for such losses.

The Committee notes that according to the Government, pursuant to sections 5(I) and (XIIIbis) and 56 of the Retirement Savings Systems Act (LSAR) of 1996, the National Commission for the Retirement Savings System is responsible for taking all the necessary measures to protect workers’ interests. It further notes that in accordance with sections 26 and 27(II), in conjunction with section 2(VI) of the Insurance and Financial Institutions Act (LISF) of 2013, insurance institutions or mutual societies may provide the insurance deriving from social security laws. The Committee also notes that the IMSS may enforce payment of social security contributions through the administrative enforcement procedure, while intervention by other bodies responsible for providing the pensions required by the IMSS means that the legal basis for life annuities and survivors’ benefits is set out in the Social Security Act, the LSAR and the LISF. The Committee further notes that, in accordance with the LISF, insurance institutions are required to constitute reserves and special funds for each of the social security schemes, and that the trustees of the trusts include the Federal Government. The Committee requests the Government to indicate whether, insofar as investment companies administered by insurers are concerned special funds and reserves exist to guarantee the solvency of the insurance institutions whether the State assumes responsibility for the compensation of workers in the event of insolvency of insurers, and to indicate the relevant provisions of the national legislation that so provide.

Part III (Sickness benefit), Article 18 of Convention No. 102. Limitation of the period of provision of sickness benefit. In its previous comments, the Committee noted the Government’s indication that, under section 37 of the Act on the ISSSTE, sickness benefits are paid for a period ranging from 30 to 120 days, depending on the seniority of the worker concerned. Recalling that pursuant to the Convention, the benefit shall be granted throughout the contingency, while authorizing the period during which the benefit is paid be limited to 26 weeks in each case of sickness, the Committee requested the Government to indicate the measures taken or envisaged to ensure compliance with this requirement of the Convention.

In this regard, the Committee notes that according to section 37 of the Act, the financial aid may continue for up to 78 weeks (52 weeks initially, and 26 weeks subsequently). This section 37 also states that workers with under one year of service may be granted leave of up to 30 days; those with between one to five years of service, up to 60 days; those who have between six and ten years of service, up to 90 days; and those who have more than ten years of service, up to 120 days, of which half are paid in full, with the second half at 50 per cent. If, at the expiry of the leave, the worker remains incapacitated for work, he or she shall be granted unpaid leave for the duration of the incapacity, for up to 52 weeks from its onset and, during the period of unpaid leave, the Institute shall pay the worker the cash equivalent of 50 per cent of the basic wage he or she was receiving at the moment of the incapacity, extended by 26 weeks if the incapacity continues. Taking into account the average number of benefits provided, the Committee requests the Government to specify whether the maximum sickness subsidy of 78 weeks’ duration is guaranteed after the expiry of the sick leave for all the above groups of workers affiliated to the ISSSTE, irrespective of their years of service, as well as to workers with less than one year of service.

Part V (Old age benefit), Article 29(2)(a) of Convention No. 102. Reduced pension after 15 years of contribution or employment. The Committee notes the Government’s indication, in response to the Committee’s request for information regarding the right to a reduced old-age pension after 15 years of contribution or employment, that following the reform of the LSS of 16 December 2020: (i) the 1,250 weekly contributions required for entitlement to an old-age benefit has been reduced to 1000 weekly contributions; (ii) sections 154 and 170 of the LSS, as amended, provide for a qualifying period of 1000 weekly contributions for entitlement to the old-age benefits branch, and to the guaranteed pension, approximately corresponding to 20 years of contributions: (iii) transitional section 4 of the Decree reforming the LSS provides for a transitional qualifying period of 750 weeks in 2021, corresponding to 15 years, which will be increased by 25 weeks annually so as to reach the 1000 weeks provided in section 170 in 2031.

The Committee also notes that under the ISSSTE pensions scheme (section 80 of the Act on the ISSSTE of 2007), it is possible to obtain an old-age pension having contributed for under 15 years, provided that there are sufficient resources attained in the individual account for a pension 30 per cent higher than the amount of the corresponding guaranteed pension. However, the Committee observes that the number of years necessary for the attaining the required level of resources to have a right to a pension may vary for different persons, and that the law does not guarantee the right to a reduced pension to all persons protected who have completed 15 years of contribution or employment, as required by Article 29(2) of the Convention. The Committee however notes that transitional section 10(I)(c) of the Act on the ISSSTE of 2007 provides for the possibility of obtaining an old-age pension after ten years of contributions.

The Committee also takes note of the measures indicated by the Government to reduce the number of weeks of contribution required to obtain a right to a reduced pension by the insured persons under the IMSS pension scheme with a view to apply Article 29(2) of the Convention.

The Committee requests the Government to specify whether both the ISSSTE and the IMSS pension schemes following the transitional period 2021-2022, as envisaged in the reform Decree of 16 December 2020, will guarantee a reduced old-age benefit for all affiliated workers who have completed a qualifying period of 15 years of contribution or employment. The Committee also requests the Government to provide the statistical information to demonstrate the application of Article 29 of the Convention.

Part XIII (Common provisions), Articles 71(3) and 72(2). General responsibility of the State for the due provision of benefits and for the proper administration of social security institutions and services. The Committee notes that, in response to its request to provide an actuarial evaluation of the various pension and health service schemes, the Government indicates that the ISSSTE produces annually the Financial and Actuarial Report (IFA) and the Financial and Actuarial Valuation (VFA). The Committee further notes the references to the editions for recent years provided by the Government. In addition, Government indicates Decision No. 15.1368.2019 approving the ISSSTE’s Institutional Programme 2019-2024, which provides, inter alia, for an analysis of the current state of the Institute, including an assessment of the problems, objectives and priorities. The Committee requests the Government to report the action taken for the implementation of the ISSSTE Institutional Programme 2019-2024, in light of the provisions of Articles 71(3) and 72(2) of the Convention.

Article 5, in conjunction with Article 10 of Convention No. 118. Payment of long-term benefits abroad. Taking note of the information provided by the Government in response to its previous comments, the Committee once again requests the Government to provide information on the benefits provided to its own nationals and to refugees and stateless persons in the event of residence in a country with which no bilateral agreement has been concluded.

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Article 28 of Part V (Old-age benefit), Articles 65 and 66 of Part XI (calculation of periodic payments) and the appended Schedule. Guarantee of the minimum level of benefit. With regard to its previous comments that the protection provided by the pension system does not provide the guarantees required under Article 65 of the Convention in respect of the minimal replacement rates for old-age pensions, the Committee notes the statistical data from the Mexican Institute of Social Security (IMSS), provided by the Government with its report. The data indicate a replacement level, between 2013 and May 2016, of between 73.6 and 74.6 per cent of beneficiaries’ average previous earnings for old-age and retirement benefits provided, in accordance with the Acts on the IMSS of 1973 and 1997. The State Workers’ Social Security Institute (ISSSTE) provided average pension replacement rates of 55 per cent up to 2016, with the average wage taken as 7,567.86 pesos and the average pension as 4,188.57 pesos.

While taking note of this information, the Committee considers that it does not demonstrate the capacity of the current IMSS and ISSSTE pension schemes to guarantee a minimum old-age pension corresponding to 40 per cent of previous earnings, for a standard beneficiary (as defined in the Schedule to Part XI of the Convention), after 30 years of contributions. As it has pointed out several times, the Committee recalls that the amount of the pensions provided by the IMSS and ISSSTE schemes, which following the 1997 and 2007 reforms, are compulsory individual capitalization accounts, cannot be determined in advance, but depend on the capital accumulated in the workers’ individual accounts, and especially on the rate of return obtained. Therefore, as the Committee concluded previously, they do not comply with the requirements of Article 65 of the Convention.

The Committee also notes that the IMSS pension scheme guarantees a minimum pension to workers on reaching the age of 60 years, having registered one thousand weeks of contributions, of which the amount is calculated according to the table appended to section 170 of the Social Security Act, reformed in 2020. According to the Government, by virtue of this reform, the amount of the pension guaranteed by the State to workers who do not have sufficient funds in their individual accounts has increased. Similarly, the ISSSTE pension scheme provides for a guaranteed monthly pension of 3,3034.20 pesos, updated annually in line with changes in the National Consumer Price Index (section 92 of the Act on the ISSSTE). The State guarantees this pension to affiliated workers that fulfil the age and qualifying period conditions laid down in section 89 of the Act.

The Committee recalls, once again, that the minimum guaranteed pension provided by the IMSS and ISSSTE can be assessed with reference to Article 66 of the Convention, which requires the rate of old-age pension to correspond to least 40 per cent of the reference wage of an ordinary adult male labourer, determined in accordance with Article 66(4–7), after 30 years of contributions.

The Committee reiterates its request and firmly hopes that the Government will be able to provide, without further delay, the information necessary to demonstrate that the rate of the minimum guaranteed pensions provided by the IMSS and ISSSTE schemes comply with the requirements laid down in Article 28, in conjunction with Article 66, of the Convention. The Committee requests the Government to provide the necessary calculations to that end, following the methodology established in Article 66 of the Convention.

The Committee is raising other matters in a request addressed directly to the Government

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The Committee has taken due note of the detailed reports sent by the Government on the manner in which the Convention is applied in law and practice, as well as its replies to the many comments previously received from workers’ organizations. In the light of the communications sent by organizations representing workers and protected persons, the Committee notes that the implementation of national social security legislation is fuelling considerable discontent and raising serious questions about the personal coverage of the system, income security in old age, and the provision and funding of health care. While the Committee agrees with the Government that some of these issues call for actions that are incumbent upon the legislative authority, the Committee would like to point out that the concerns raised by the trade unions relate to the predictability and adequacy of benefits, as well as on the need to ensure the financial, budgetary and economic sustainability of the system and, as such, they are related to the main objectives of the Convention. The Committee hopes that the Government will reply to these concerns effectively, in association with the representative employers’ and workers’ organizations and other relevant organizations representing the persons concerned, and with the help of the Office if necessary. With a view to having a better understanding of the application of the Convention in the country, the Committee would like to continue the dialogue with the Government and social partners to identify the prerequisites for improving the functioning of the social security system in law and practice in order to fulfil the requirements of international social security standards ratified by Mexico.

Part XI of the Convention. Calculation of periodical payments. Article 6, read in conjunction with Article 28 of Part V (Old-age benefit). Since Mexico first introduced in 1997 a system of compulsory individual capitalization accounts for any person entering the labour market after this date, the Committee has regularly pointed out that the protection guaranteed by this type of system is contingent upon the profitability of the funds invested and that there is no mechanism for reviewing the assets in relation with prices, wages or a combination of both. Consequently, this system does not provide the guarantees required under Article 65 of the Convention with respect to the minimal replacement rates that have to be guaranteed after a certain period of contribution in relation to the earnings of the persons concerned. Since 2007, a similar scheme has also been applied to the public sector. The Committee notes with regret that, notwithstanding various requests it has made, the Government has not proven by means of statistics that the replacement level of 40 per cent required by the Convention has been reached. The Mexican legislation nevertheless provides for the payment of a minimum guaranteed pension when the funds available in workers’ individual accounts do not ensure a certain level of pension for their beneficiaries. This minimum wage guaranteed by the State is equal to the general minimal wage for the Federal district in the private sector, and twice this amount in the public employees’ scheme. The fact that there is a minimum guaranteed pension makes it possible to examine the compliance of the Mexican pension scheme with Article 66 of the Convention, and to ascertain whether the level of the guaranteed minimum pension accounts for at least 40 per cent of the reference wage of an ordinary adult male labourer selected, in accordance with the methodology established by this provision of the Convention. The Committee regrets that the Government has not replied to its questions on this matter and has not proven that the amount of the minimum state guaranteed pension (when the funds accumulated in the individual accounts of persons insured with the Mexican Institute of Social Insurance (IMSS) or the State Workers’ Social Security Institute (ISSSTE) schemes do not enable them to benefit from a pension at least equivalent to the minimum pension) reaches the minimum established by this provision of the Convention. The Committee therefore concludes that the pension system in Mexico does not comply either to the requirements under Article 65 or Article 66 of the Convention.

Article 71(3), read in conjunction with Article 72(2). General State responsibility for the provision of services and the proper administration of social security institutions and services. In its comments received on 31 August 2012, the National Union of Workers (UNT) alleges that the adoption of the Act on the ISSSTE in 2007 resulted in nullifying the principle established by the countries’ Constitution whereby the State shall assume responsibility for guaranteeing protection against social and economic risks. The reform was undertaken without making a proper diagnosis of the state of the hotel infrastructure and health-care services, of which funding was not guaranteed – only 22 per cent of pensioners’ required health-care services are funded, for example. In fact, only about 14 per cent of public employees opted for the new system, which reveals the limited interest of the protected population. This entailed costly adjustments and considerable transfers of public funds to offset the lack of funding from the contributions of persons covered (4.2 per cent of the 2012 GDP between 2007 and 2011). The actuarial report conducted in 2010 acknowledged that the ISSSTE reform had not entirely resolved the problem of the funding of health-care services. Pointing out that the ISSSTE reform was implemented in 2007, the UNT believes that the ISSSTE should publish disaggregated and full information that provides a global overview of the situation and adherence to objectives, as well as of the Institute’s future viability. In this context, the Committee notes that the Government intends carrying out an actuarial survey on the various pension schemes and health services as prescribed by the Convention. The Committee requests the Government to communicate the findings of this survey to the social partners and supply a copy of it with its next report. The Committee also notes the information provided by the Government in its 2011 and 2012 reports concerning measures taken to bring the ISSSTE deficit under control, such as: the covering, by the federal Government, of the pensions paid under the transitional scheme and deficits, in accordance with section 231 of the Act on the ISSSTE; the establishment of a reserve fund; and the actualization and review of contributions every four years. The Committee hopes that as a result of these measures, the Government will be able to indicate in its next report that the social security system is once again on the way towards sustainable development.

Article 18. Limitation on the duration of sickness benefits. The Government states that, according to section 37 of the Act on the ISSSTE, sickness benefits are paid during a period ranging from 30 to 120 days depending on the seniority of the employee concerned. Recalling that the Convention stipulates that the payment of benefits shall be granted throughout the contingency, while authorizing that the benefit may be limited to 26 weeks in each case of sickness, the Committee requests the Government to indicate the measures taken or envisaged to ensure respect of this requirement of the Convention.

Article 29(2). Reduced pension after 15 years of contribution or employment. The Committee notes that in order to benefit from an old-age pension on the basis of accumulated funds in a person’s individual capitalization account or on the basis of a state guaranteed minimum pension, a person protected under the IMSS or ISSSTE scheme must justify 25 years of contribution and have reached the age of 65 years. It the protected person has not fulfilled the minimum qualifying period of contribution, he or she may continue to pay contributions or receive a lump sum. Recalling that the Convention guarantees a reduced benefit to a protected person who has completed a qualifying period of 15 years of contribution or employment, the Committee asks the Government to indicate how the national legislation gives effect to this requirement of the Convention.

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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.]

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The Committee took note of the Government’s report received in September 2008 containing a reply to the Committee’s previous comments, in which the Committee has also referred to the Government’s reply of 27 November 2007 to the observations of a number of trade unions (the Trade Union of Workers of the National Autonomous University of Mexico; the National Trade Union of Workers of the Ministry of Agriculture, Livestock, Rural Development, Fisheries and Food; the Single Trade Union of Workers of the Nuclear Industry; the Independent Trade Union of Workers of the Autonomous Metropolitan University; the National Union of Education Workers (14 sections); the Trade Union of the National Council for Culture and the Arts; the Administrative Union of the Autonomous University of San Luis Potosí) in 2007 alleging breaches of the Convention by the new Act on the State Workers’ Social Security and Services Institute (ISSSTE). Further observations on this issue, dated 26 August 2008, were received from the Union of Lawyers of Mexico acting in the name of the Alianza de Tranviarios de Mexico, Single Union of Government Workers of the Federal District (SUTGDF), de la Seccion XVIII (Michoacan) of the National Union of Education Workers (SNTE) y de la Seccion XXII (Oaxaca) del SNTE. The United Trade Union of Government Workers of the Federal District (SUTGDF) has supplied additional observations in the communication dated 27 August 2008. The Committee notes that the trade unions’ allegations contest the application by Mexico of virtually every Article of the Convention. In view of the volume and the detailed nature of these allegations and the fact that the next report of the Government should be a detailed report containing full information on the application of every Article of the Convention according to the report form adopted by the Governing Body, the Committee decided to concentrate its present comments on the main questions, which would help the Government to prepare a fully informative report for the Committee’s examination next year. To conduct such an examination in full knowledge of the situation, the Committee needs the report to enlighten it in particular on the following two issues: on the legal certainty as to the state of the current legislation in view of the constitutionality of the ISSSTE being challenged in the Supreme National Court of Justice, and certainty as to the level and sustainability of benefits provided by the reformed social security system after the previous defined benefit collectively financed  pay-as-you-go scheme was replaced by a defined contribution individual savings account system.

Legal certainty as to the state of the applicable national legislation

According to the information communicated by the trade unions, 85 per cent of the 2.3 million public employees insured by ISSSTE consider that this Act violates their acquired rights and imposes stricter conditions for entitlement to certain benefits. Hence, more than 2 million public workers submitted constitutional complaints (amparos constitucionales) contesting the constitutionality of the Act and of the Regulation on the exercise of the right of option under section Ten of the transitional provisions ((Décimo Transitorio o BONOISSSTE). According to the Law on constitucional complaints (Ley de Amparo), any such complaint has to be resolved in the period of 60 days and suspends during this period the application of the contested provision of the legislation. To deal with the mass of these complaints, the Supreme National Court of Justice (SCNJ) has set up two special tribunals mandated to consider these complaints.

The Committee notes that the Government’s report was received in September 2008 when the Supreme Court had just started to consider these cases and therefore contained no information in this respect. To the extent that the application of the contested provisions of the ISSSTE might have been suspended, the Committee asks the Government to explain the decisions taken by the Supreme Court in these cases and their effect on the application of the ISSSTE Act in law and practice. The Committee further notes that the Supreme Court declared unconstitutional sections 20, 25, 60 final part, 136, 251 and subsection IV of section ten transitional, as well as, in June 2008, the provision on the calculation of pension on the basis of average wage received for the last three years before retirement, which reduced the possibility for public employees to receive a higher pension, and decided instead that the pension should be calculated taking into account only the last year’s wage. The Committee asks the Government to indicate whether there were other decisions of the Supreme Court declaring unconstitutional the provisions of the ISSSTE and to supply the new text of all provisions, which were modified.

Certainty as to the level and sustainability of benefits

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 and assess estimated level of benefits, in particular the replacement rate of the new scheme. Such actuarial valuation should be comprehensive and, henceforth include all liabilities of the new 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. If such is the case, The Committee requests information on the standard assumptions of the actuarial in terms of real interest rate, density of contribution that would guarantee the 40 per cent required by the Convention. Also the Committee requests to describe the mechanism of the adjustment of changes in the cost of living and the general level of wages.

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 notes this information with interest. However, it has not found 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 the double of the minimum pension level established by the Convention, and the guaranteed pension of the IMSS, which is hardly 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 2011 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.

Communications from representative organizations on the application of the Convention. The Committee notes the information transmitted by the Trade Union of Telephone Operators of the Mexican Republic in the communication dated 22 February 2010 concerning the situation of the AVON company workers and the settlement reached with the IMSS, which were the subjects of the Committee’s previous comments. The Committee will examine this communication at its next session together with the comments that the Government would wish to formulate in this respect.

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The Committee notes the information sent by the Government in its report. It asks the Government to provide further information on the following points.

State workers’ social security scheme (ISSSTE)

Part II. Articles 7 and 8 of the Convention. The Committee notes that the purpose of the health insurance scheme is to protect, promote and restore the health of its members by providing high-quality health services in a timely manner. The components of the health insurance are preventive medical care, curative medical care, maternity care and physical and mental rehabilitation (section 27 of the ISSSTE Act). It asks the Government to indicate the measures taken to give effect to the abovementioned provisions of the Convention.

Article 10, paragraph 1. The Committee notes that, pursuant to section 31 of the ISSSTE Act, the medical services for which the Institute is responsible pursuant to the chapters on health insurance and occupational risk insurance, shall be provided directly by the Institute or through agreements between the Institute and the service providers, in accordance with the relevant regulations. The agreements shall be concluded preferably with public institutions in the health sector. In such event, the institutions subscribing to the agreements shall be required to provide the services directly and to send the Institute any medical or administrative reports and statistics it may request. The Committee asks the Government to provide information on the application of agreements for the provision of medical services, particularly with private care providers.

Part VI. Employment injury benefit. Article 34. The Committee takes note of the benefits in kind envisaged in section 61 of the ISSSTE Act. It asks the Government to indicate how, and under which provisions, the medical care to be provided to victims of employment injury includes, in accordance with Article 34 of the Convention, dental care (clause (b)), nursing care at home (clause(c)), maintenance in hospitals, convalescent homes, sanatoria or other medical institutions (clause (d)), dental supplies, eyeglasses and prosthetic appliances (clause (e)), and the care furnished by members of such other professions as may be legally recognized as allied to the medical profession (clause (f)).

General scheme (IMSS)

Article 36, paragraph 3(b). In its previous comments the Committee noted that, according to section 58 of the Social Security Act, periodical payments due in the event of employment injury, where a worker suffers partial permanent incapacity of between 20 and 50 per cent, may be converted into a lump sum. The conversion of periodical payments into a lump sum is optional where the incapacity is greater than 25 per cent and less than 50 per cent. The Committee accordingly drew the Government’s attention to the need for the competent authorities to adopt the necessary measures, in accordance with this provision of the Convention, to satisfy themselves that the beneficiaries will use the lump sum properly.

In its report the Government states that it is in compliance with Article 36 of the Convention, since a lump sum is paid only when the permanent incapacity is partial and lower than 50 per cent. In the Government’s view, if any degree of incapacity up to 50 per cent is taken to be slight, then the requirements of the Convention are met. The Committee takes note of this statement. The Committee has always considered that permanent incapacity where the degree of loss of earning capacity is higher than 25 per cent cannot be considered slight. A loss of over 25 per cent of the normal capacity to work in his usual occupation prevents the worker from performing his essential duties. To consider any degree of incapacity up to 50 per cent as slight is to devoid of all meaning the letter and spirit of Article 36, paragraph 3(a), of the Convention. The Committee therefore expresses the hope that the competent authorities will take the necessary steps, in accordance with this provision of the Convention, to satisfy themselves that beneficiaries use the capital paid to them properly.

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The Committee takes note of the detailed report sent by the Government. It notes the Government’s information on the application of paragraph 1, Article 10, Part II (Medical care), of the Convention. The Committee also notes the communications from the following workers’ organizations: the Trade Union of Workers of the National Autonomous University of Mexico; the National Trade Union of Workers of the Ministry of Agriculture, Livestock, Rural Development, Fisheries and Food; the Single Trade Union of Workers of the Nuclear Industry; the Independent Trade Union of Workers of the Autonomous Metropolitan University; the National Union of Education Workers (14 sections); the Trade Union of the National Council for Culture and the Arts; the Administrative Union of the Autonomous University of San Luis Potosí. The above organizations allege breaches of Convention No. 102 arising from the adoption of a new Act on the State Workers’ Social Security and Services Institute (ISSSTE). The Committee also takes note of the detailed information communicated by the Government on 27 November 2007, in reply to the comments made by the trade unions. It will examine the abovementioned communications at its next session.

State workers’ scheme (ISSSTE)

The Committee notes the entry into force of the new ISSSTE Act, published in the Diario Oficial de la federación (Official Journal) of 31 March 2007. Like the 1997 Social Security Act, the new ISSSTE Act associates the private sector in the achievement of the objectives pursued by social security. It groups the 21 branches of insurance, services and benefits contemplated in the old Act into four branches similar to those established in the 1997 Social Security Act and a section on social and cultural services: retirement, unemployment among older workers and old age; invalidity and life; occupational risks, and health. The new Act introduces major reforms, particularly in pensions. An individual capitalization system (defined contributions) with a personal account for every member of the scheme replaces the former pay-as-you-go system (defined benefits). Workers affiliated to the ISSSTE are now required to have an individual account in the PENSIONISSSTE or, if they so wish, in a pension fund management company (AFORES). Individual accounts are funded by contributions from the worker and from state departments and bodies. Under the Social Security Act, the AFORES are responsible for investing the funds deposited in the individual accounts through investment companies specializing in the placement of pension funds (SIEFORES). The latter also need authorization from the Commission on the Retirement Savings System, which is likewise responsible for supervising their activities and those of the AFORES. The companies charge commissions, which are deducted from the workers’ personal accounts. Upon retirement, workers may convert the balance of their individual accounts into a pension in the form either of a life annuity or of programmed withdrawals. The resources accumulated in the personal accounts are also used to finance invalidity and survivors’ benefits. In certain circumstances, workers may make withdrawals from their personal accounts for specific purposes (marriage, unemployment, etc.). The State guarantees a minimum pension equal to 3,034 pesos and 20 centavos (3,034.20) (section 92, ISSSTE Act).

Under the new retirement pension system, workers in activity may opt to remain in the old, defined-benefit system or to switch immediately to the new, defined-contribution system, while workers entering the labour market automatically join the new system. The new ISSSTE Act also provides for the transfer of savings accumulated under the ISSSTE Act or the Social Security Act. For workers opting to switch to the new system and workers entering the labour market, the new ISSSTE Act provides for the transfer of accumulated savings between the IMSS and the ISSSTE. The Committee asks the Government in its next report to provide detailed information, including statistics, on the extent to which the new legislation gives effect to each provision of the Convention, in accordance with the report form on the Convention. The Government is also asked to provide information on the procedure that applies in respect of workers opting to remain in the old system who have both acquired rights and savings in the IMSS. The Committee hopes that the next report will also contain information on the measures adopted to give effect to the following provisions of the Convention.

Part III. Sickness benefit. Articles 17 and 18 of the Convention. The Committee notes that, under section 37 of the new Act, workers prevented by sickness from carrying out their jobs shall be entitled to leave with pay or half pay from the department or body for which they work, corresponding to length of service. Under this provision, depending on length of service (from less than one to over ten years) they may be granted sick leave for non-occupational sickness, for periods ranging from 15 days with full pay and 15 days with half pay, to 60 days with full pay and 60 days with half pay. Upon expiry of the leave with half pay, they are entitled to a cash subsidy equal to 50 per cent of the basic wage at the onset of the incapacity. Since, under section 17 of the ISSSTE Act, the basic wage is taken to calculate contributions, the lower limit being the minimum wage and the upper limit ten times the minimum wage, the Committee asks the Government to indicate the components of the basic wage.

Part V. Old-age benefit. Articles 28, 29 and 30 of the Convention. (a) The Committee recalls that, under the provisions of the Convention, read in conjunction with Part XI (Standards to be complied with by periodical payments), the level of the old-age benefit must attain 40 per cent of the reference wage for a standard beneficiary who has completed a qualifying period consisting either of 30 years of contributions or employment or 20 years of residence. This level must be guaranteed throughout the contingency, regardless of the type of pension chosen (life annuity or programmed retirement). The Committee observes that, for persons fulfilling the requirements for eligibility to the old-age pension established in the legislation, the amount of this pension appears not to be determined in advance but to depend on the capital saved in the workers’ personal accounts, particularly the return thereon. However, 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 pesos and 20 centavos (3,034.20), which will be updated once a year, in February, on the basis of the yearly change in the National Consumer Price Index. In these circumstances, the Committee expresses the hope that in its next report the Government will provide the statistical information required in the report form under Article 66 of the Convention, to enable the Committee to ascertain whether, in practice, the minimum amount of the old-age pension attains the percentage prescribed by the Convention.

(b) The Committee requests the Government to indicate how it ensures that effect is given to Article 30 (throughout the contingency) in respect of the “programmed retirement” scheme provided for in section 159 of the Social Security Act. Please indicate in particular whether the beneficiary is entitled to payment of the “guaranteed pension” established in section 91(II) of the ISSSTE Act when the capital saved in the individual account is exhausted.

(c) The Committee notes that, under section 89 of the ISSSTE Act, workers are entitled to an old-age pension when they reach the age of 65 and have completed a minimum qualifying period of 25 years of contributions. The Committee asks the Government to indicate in its next report how effect is given to Article 29, paragraph 2(a), of the Convention, under which a reduced old-age pension must be secured as a minimum for a protected person who has completed, prior to the contingency, a qualifying period of 15 years of contributions or employment.

Part VI. Employment injury benefit.  Articles 36 and 38. The Committee notes that, according to section 62(III) of the ISSSTE Act, in the event of total incapacity, the worker shall receive a pension until the age of 65 years by taking out pension insurance that pays him income equal to the basic wage he received at the onset of the risk, regardless of his length of service (section 63 of the Act). Upon expiry of the pension insurance, the worker will receive an old-age pension if he meets the corresponding requirements, otherwise he will receive the guaranteed pension. The Committee takes note of this information. It points out to the Government that, according to the Convention, the benefit for permanent total incapacity (Article 36) shall be a periodical payment that must be granted throughout the contingency (Article 38). Unlike Article 58 (Part IX. Invalidity benefit), Article 38 of the Convention does not allow the benefit for permanent total incapacity to be replaced by old-age benefit. The Committee points out that replacement of permanent incapacity benefit deriving from an occupational risk by an old-age pension would be compatible with the Convention only if the amount of the latter is at least equal to that of the former, and provided that it is not subject to any qualification requirement. It accordingly asks the Government to indicate the measures it has in mind to ensure compliance with the Convention.

Part XI. Standards to be complied with by periodical payments. Employment injury benefit, Article 36, invalidity benefit, Articles 56 and 57, and survivors’ benefit, Articles 62 and 63. The Committee would be grateful if the Government would provide all statistical information relating to calculation of the benefits referred to under Article 65 (Titles I, II and IV).

The Committee notes that, according to section 121 of the Social Security Act, the invalidity pension for workers meeting the qualification requirements in section 118 is equal to a basic amount of 35 per cent of the average basic wage of the year immediately preceding the date of the onset of the workers’ invalidity. The amount shall not be less than the pension established in section 170 of the Social Security Act at the date of entry into force of the ISSSTE Act and it shall be updated annually, in February, on the basis of the updated adjustment of the Consumer Price Index. As to the amount of the survivors’ benefit, the members of the insured person’s family, in the order laid down in section 131 of the ISSSTE Act, are entitled to a pension equal to 100 per cent of the pension that would have been payable to the worker or of the pension he was receiving. The Committee reminds the Government that, under the abovementioned provisions of the Convention, read together with the provisions of Part XI (Standards to be complied with by periodical payments), invalidity benefit, including the family allowances paid to the standard beneficiary (man with wife and two children) must attain at least 40 per cent of the former earnings and the family allowances paid to the beneficiary when he was in activity. As to the amount of the widow’s pension, it must likewise attain, for a standard beneficiary (widow with two children), 40 per cent of the previous earnings of the breadwinner (including the family allowances paid both during employment and during the contingency). In view of the fact that, under section 121 of the ISSSTE Act, invalidity benefit may not be less than the “guaranteed pension” established in section 170 of the Social Security Act, equal to the general minimum wage for the Federal District, the Government may deem it appropriate to avail itself of the provisions of Article 66 of the Convention. The Committee asks the Government in its next report to provide the statistical information requested by the report form under this provision 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.

Part XIII. Common provisions. Administration and oversight of the social security system. Articles 71 and 72. The Committee notes that, according to section 14 of the ISSSTE Act, the Institute shall compile and classify information on insured persons with a view to drawing up pay scales, working out length of services averages, drawing up mortality and morbidity tables and, in general, compiling the necessary statistics and actuarial calculations to achieve and maintain the financial equilibrium of the resources and to comply adequately and efficiently with the insurance schemes, benefits and services that it is required to administer by law. The Committee also notes that, under section 5 of the ISSSTE Act, the ISSSTE is responsible for the management of the insurance schemes, benefits and services established in the law and of the Housing Fund, the PENSIONISSSTE, its delegations and other decentralized bodies. The Committee deems it appropriate to stress that there needs to be an overall actuarial evaluation of the entire social security system, which should henceforth include the part corresponding to the state workers’ scheme. It asks the Government to state whether the necessary actuarial studies and evaluations have been carried out to ensure the financial equilibrium of the new system and, if so, to provide the results thereof.

General scheme (IMSS)

1. Part II. Medical care. In its previous comments, the Committee noted that, pursuant to section 89 of the Social Security Act, the Mexican Social Security Institute (IMSS) may provide the medical care 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 care providers; or (iii) indirectly, through the conclusion of agreements with enterprises that have their own medical services. The Government provides information on the content of the agreements used by the IMSS for the provision of medical care, and indicates that the provision of medical care and the payment of subsidies for temporary incapacity to work, which under the terms of the agreement is the responsibility of the enterprise, shall be subject to inspection and monitoring by the IMSS, regardless of the obligation they both have. Where the Institute finds defects in the provision of benefits by the enterprise, and these are confirmed as a result of the relevant investigations, it shall order and execute suitable measures to remedy them under the terms of the Social Security Act and its applicable regulations. The Government adds that since at present there are no agreements on the transfer of responsibility for care provision with reimbursement of contributions, it has no inspection reports on the matter. The Committee takes note of this information. It asks the Government to keep it informed of any such transfer agreements concluded.

2. Part V. Old-age benefit. Articles 28, 29 and 30 of the Convention. 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 amount of the pension is not determined in advance, but depends on the capital saved in the workers’ personal accounts and particularly the return on the capital, which has to be entrusted to the management of a retirement fund management company (AFORE) chosen by the worker. However, 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. The Government indicates in this connection that the guaranteed pension is increased annually, in February, in accordance with the previous year’s variation in the National Consumer Price Index, the aim being to maintain the purchasing power of the pension in line with trends in the prices of goods and services. The Committee takes note of this information. It also notes the detailed statistics provided in the manner indicated in the report form approved by the Governing Body under Article 66 of the Convention, Titles I and III. The Committee notes that, according to the above information, the amount of the minimum guaranteed pension for 2006 is equal to 42.95 per cent and not 30.82 per cent, as indicated in the precious report, of the wage of an ordinary adult male labourer selected in accordance with the provisions of Article 66 of the Convention. The Committee requests the Government in its next report to provide information on recent increases in amounts of pensions as a consequence of variations in the National Consumer Price Index, together with particulars, for one and the same period, of the cost of living index and the amount of benefits.

3. (a) In its previous comments, the Committee asked the Government to provide information, including statistics and, where appropriate, reports of the supervisory bodies, indicating the average percentage which has in practice been used for the payment of commissions – on both contributions and capital – since the entry into force of the Act. In its report, the Government indicates that, in addition to the tripartite contribution, the Government makes a social contribution, which is a fixed amount for each day worked (2.92 pesos in April 2007) equivalent to roughly 2 per cent of the wage of an average worker. As to the average of commissions paid in practice, which includes commissions on contributions and capital, it has amounted to 1.58 per cent from the start-up of the system to the end of 2006. The highest such percentage – 1.81 per cent – was reached in 2000 and the lowest – 1.38 per cent – in 2006. In percentage terms, the drop in commissions in that period amounted to 24 per cent. The Committee takes note of this information. It notes in particular that the information on receipts from AFORES’ commissions refers to the annual wage bill. The Committee accordingly asks the Government to provide statistical data on the annual receipts from commissions in relation to the amount of the contributions devoted to old-age insurance. It would also be grateful if the Government would provide information on the commissions that an ordinary unskilled worker has had to pay since the system came into operation.

(b) In its previous comments, the Committee noted that the basic capital for the provision of invalidity, life and employment injury pensions which is transferred to the insurance company for the provision of a life annuity, is calculated in accordance with the mortality tables for invalids by age and by sex. It asked the Government to provide information, disaggregated by age and by sex, on the amount of the commissions charged by the AFORES and insurance companies in respect of life annuities. The Government indicates in this regard that insurance companies charge no commission at all on the pension received or the funds accumulated by the pensioner. Under the Mexican pension scheme, commissions are charged by the AFORES while the savings are being accumulated in the personal account, but once the pensioner fulfils the legal requirements for receiving it, the life annuity is bought in the insurance sector. The price of the life annuity includes a surcharge of 1 per cent over the price of the net premium to cover administration and purchase costs, and a 2 per cent surcharge as a safety margin for any deviations in the accident rate. The Government also provides information on the commissions that the AFORES charge both on capital and on contributions. The Committee wishes to point out that this information does not allow an assessment of the accumulated impact of the two commissions for an average unskilled ordinary labourer. It accordingly asks the Government to provide such information. The Committee also notes that the IMSS does not have information disaggregated by age and sex on the amount of the commissions charged by insurance companies (life annuities) during the passive phase. It observes that information of this kind is of the utmost importance in view of the fact that the system is based on periods of saving and periods of use which are reflected in the personal account and which vary considerably depending on the sex and age upon the entry into force of the Act. The Committee therefore hopes that the Government will take all necessary steps to compile and send the information requested.

As to the basic capital transferred to insurance companies, the Government states that, under the Federal Labour Act (LFT), the benefits provided for workers in respect of occupational risks include an obligation on employers to pay an indemnity, which is granted once only (sections 487(IV), 491 and 492). The Social Security Act (LSS) establishes a system of protection in the event of occupational risks which is independent of that in the LFT but which is consistent with it. The LSS provides, in section 53, that an employer which has insured its workers shall be discharged from the obligations laid down in the LFT in respect of liability for occupational risks. Since it establishes more advantageous benefits for the worker and is independent of the system envisaged in the LFT, the funding of the benefits the LSS regulates comes essentially from the contributions of the occupational risk insurance, which are borne by the employer. The pensions for occupational risk are financed in part from the employers’ contributions paid by this insurance and in part on a tripartite basis, i.e. by the employer, the workers and the State, from the resources deposited in the worker’s personal account in the retirement savings system. In the Government’s view, the provisions it cites are consistent with the provisions of the Convention. The Committee takes note of this information. It agrees with the Government that the LFT places an obligation on employers in favour of workers who are victims of occupational risk and that the LSS establishes a system of protection for this purpose. It notes the information supplied in the actuarial evaluation concerning occupational risk insurance, which points out that workers’ savings account for a significant and growing part of the financing, whereas the LFT and the LSS place an obligation solely on the employer. The Committee wishes to stress that, in the actuarial evaluation supplied by the Government, it is indicated that the actuarial techniques recommended by the ILO are applied. The Committee nonetheless observes that, in the information sent by the Government, there are elements of actuarial calculations that have no basis in the current legislation. The Committee reminds the Government that the Convention establishes a duty to ensure, where appropriate, that the necessary actuarial studies and calculations concerning financial equilibrium are made periodically, and that such evaluations must be strictly in keeping with the existing legal provisions. The Committee accordingly reiterates its request for a comprehensive actuarial evaluation encompassing all the branches of insurance covered in the compulsory scheme, including, in particular, retirement, retirement at an advanced age and old-age insurance.

4. 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 contributions or employment. The Committee noted that, due to the recent switch to a fully funded system, persons who draw pensions under the retirement, retirement at an advanced age and old-age scheme, have not accumulated sufficient resources in their individual accounts to finance the respective pensions. However, workers who were first insured under the Social Security Act of 12 March 1973 need only 500 weeks of contributions, equivalent to ten years of contributions, to be entitled to this benefit. With regard to workers covered by the new Social Security Act who fulfil the conditions in Article 29, paragraph 2, of the Convention, the Committee observes that the Government merely states that protected persons who have completed, prior to the contingency, a qualifying period of 15 years of contributions or employment, while not having a guaranteed pension, do receive medical benefits from the IMSS and the balance of the funds in their personal accounts. In these circumstances, the Committee can but express once again the hope that the Government will be able to re-examine the situation and indicate the measures adopted or envisaged to secure the provision of a reduced old-age benefit to all persons protected who have completed, prior to the contingency, a qualifying period of 15 years of contributions or employment, in accordance with the provisions of the Convention on this point.

5. Part XIII. Common provisions. (a) (Article 71). Financing The Committee takes note of the information on the financing of benefits. It requests the Government to indicate how effect is given to Article 71, paragraph 2, of the Convention, in respect of employment injury benefits, in so far as the capital accumulated in the individual accounts of workers goes towards the financing of such benefits, under the terms of sections 58 and 64 of the Social Security Act.

The Government indicates that the capital withdrawn from the individual account for the financing of the pension is commensurate with the percentage of the degree of permanent incapacity. For example, where an insured person is evaluated at 30 per cent incapacity, no more than 30 per cent of the total capital in the account at the date of the commencement of the pension will be withdrawn, and such resources serve to finance the pension, with the difference to reach the basic capital required for the provision of the pension being provided by the IMSS through the amount insured. The Government adds that, in view of the relatively brief period since the reform of the pension system, the accumulation of capital in workers’ individual accounts is still relatively insignificant in terms of contributing to the basic capital, with the result that this type of benefit is covered by the amount insured, which comes from employers’ contributions. The Committee requests the Government to indicate the source of the resources under each system considered for each of the Parts of the Convention accepted, with an indication in particular of the rate or the level of the amounts deducted from earnings to finance each system, through either contributions or taxation. As employment injury benefits are covered by a specific insurance, please indicate the level of resources allocated for the financing of such benefits.

(b) Articles 71, paragraph 3, and 72, paragraph 1. Administration and oversight of the social security system. In its previous comments, the Committee stressed the need for an overall actuarial evaluation of the entire social security system. Since the Government has not responded to its previous comments, the Committee can only stress that, in order to ensure application of Article 71, paragraph 3, in full, such an evaluation needs to cover the various pension schemes including and 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, encompassing the responsibilities of the IMSS, INFONAVIT and the SAR, including collection, management, supervision and control. The Committee reiterates that the viability and sustainability of the system depend on detailed analysis of the real and foreseeable development of the system as a whole. Indeed, this is the very essence of an actuarial study. Only an overall actuarial evaluation 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. It accordingly asks the Government to take the necessary measures to give effect to this provision of the Convention and to provide information on progress made in this matter.

6. Communications from representative organizations on the application of the Convention. The Committee noted in its previous comments a communication of 8 March 2005 from the Independent Trade Union of Workers of the National Consumer Protection Office (SITPROFECO), and the Government’s reply of 11 September 2006. It has likewise taken note of the legal action brought by AVON and the court’s decisions. It notes that, on 30 October 2006, AVON and the IMSS reached a settlement out of court. It further notes the inspection visits carried out by the IMSS and the household visit that the IMSS undertook in the course of 2007. The Committee asks the Government to indicate the impact of all the actions by the IMSS to remedy the situation of the AVON workers who were wrongfully disaffiliated from the compulsory social security scheme, providing information on: (a) the settlement reached by the IMSS and AVON; (b) the outcome of the house visit referred to; and (c) the content of the IMSS’s final report of 3 July 2007.

The Committee seeks further information in a request addressed directly to the Government.

[The Government is asked to reply in detail to the present comments in 2008.]

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With reference to its previous comments, the Committee notes the information provided by the Government in its report. It once again requests the Government to provide additional information on the following points.

Part VI (Employment injury benefit). 1. Article 34. In its previous comments, the Committee requested the Government to indicate in what manner and under which provisions the medical care that must be provided to victims of employment injuries includes, in accordance with Article 34 of the Convention, dental care (point (b)), nursing care at home (point (c)), maintenance in hospitals, convalescent homes, sanitoria or other medical institutions (point (d)), dental supplies, eyeglasses and prosthetic appliances (point (e)), and care furnished by members of such other professions as may be recognized as allied to the medical profession (point (f)). The Committee noted that the provisions to which the Government referred, namely section 29(b) and (d) of the Social Security Act, which refer to section 15(I) of the above regulations, establish that sickness and maternity insurance does not cover the provision of eyeglasses or dental care, with the exception of extractions, fillings and cleaning. In view of the fact that the Government refers once again to the same legislative provisions, the Committee is bound once again to hope that the Government will take the necessary measures to ensure the provision of full dental care and of eyeglasses, in accordance with Article 34(c) and (e) of the Convention.

2. Article 36, paragraph 3(b). In its previous comments, the Committee noted that, in accordance with section 58 of the Social Security Act, periodical payments due in the event of employment injury, where a worker suffers partial permanent incapacity of between 25 and 50 per cent, may be converted into a lump sum. The conversion of periodical payments into a lump sum is optional where the incapacity is greater than 25 per cent and less than 50 per cent. The Committee therefore drew the Government’s attention to the need for the competent authorities to adopt the necessary measures, in accordance with this provision of the Convention, to satisfy themselves that the beneficiaries will use the lump sum properly. In its reply, the Government indicates that this provision of the Convention could be in violation of one of the individual guarantees established by the Political Constitution of the United States of Mexico. The Committee notes this information. It is bound to emphasize that Article 36, paragraph 3(b), of the Convention is not intended to deprive the worker of the product of her or his work. The objective of this provision is to enable the worker, and all those dependent on the worker, to meet her or his needs throughout the contingency and, where the periodical payment is converted into a lump sum, for the competent authorities to satisfy themselves, in the interests of the insured person, of its proper utilization. It is therefore the responsibility of the competent authorities to establish the conditions in which they can satisfy themselves that beneficiaries will use the lump sum provided to them properly. It therefore requests the Government to take the necessary measures for this purpose.

Part XI (Standards to be complied with by periodical payments), Article 65 in relation to Articles 16, 36, 50, 56, 57, 62 and 63. 1. In its previous comments, the Committee noted that the Government had recourse to paragraph (d) of Article 65(6) in determining the skilled manual male employee and that the wage of a skilled male manual employee must be equal to 125 per cent of the average earnings of all the persons protected. In its latest report, the Government refers instead to the information provided under Part V of the Convention (old-age benefit), for which it has recourse to Article 66 of the Convention, Titles I and III of the report form. Noting that these benefits are calculated on the basis of the last daily wage on which contributions are calculated, the Committee requests the Government to provide information on the amount of sickness benefit, employment injury benefit, maternity, invalidity and survivors’ benefit, for which recourse is had to the provisions of Article 65 of the Convention.

Part XI (Standards to be complied with by periodical payments), Articles 65, paragraph 10, and 66, paragraph 8 (Adjustment of the rate of benefit). The Committee notes the information provided by the Government on fluctuations in earnings and benefits during the period December 2002 to June 2006. It requests the Government to provide information on the cost-of-living index for the same period.

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The Committee notes the particularly detailed information, including statistics, provided by the Government in reply to its previous comments, following the entry into force in 1997 of the new legislation which associates the private sector in the achievement of the objectives pursued by the social security. With reference to its previous comments, the Committee notes the information provided on the application of Article 72, paragraph 1, of the Convention (participation of the persons protected in the management of institutions), and of Articles 65, paragraph 10, and 66, paragraph 8 (adjustment of the amount of benefit), Part XI (Standards to be complied with by periodical payments). The Committee also notes the communication dated 8 March 2005 from the Independent Trade Union of Workers of the National Consumer Protection Office (SITPROFECO), and the Government’s reply dated 11 September 2006 (see point 6 of the observation). The Committee requests the Government to provide information on the following points.

1. Part II (Medical care). In its previous comments, the Committee noted that, in accordance with section 89 of the Social Security Act, the Mexican Social Security Institute (IMSS) may provide the medical care 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; or (iii) indirectly, through the conclusion of agreements with enterprises with their own medical services.

In this respect, the Committee requested the Government to provide copies of agreements for the transfer of responsibility for the provision of care concluded with service providers (care providers in the private sector), as well as copies of reimbursement agreements and agreements for the provision of care concluded with enterprises with their own medical services, or with other institutions referred to in the report. The Government indicates in its report that, in accordance with sections 18 and 21 of the Federal Act on Transparency and Access to Government Public Information, of 11 July 2002, the IMSS is not in a position to provide copies of the agreements that it has concluded, as they contain personal data which are confidential. In this respect, the Government provides models of the agreement used by the IMSS for the provision of medical services. The Committee notes these models. It wishes to draw the Government’s attention to the fact that it is not the intention of the Committee to obtain any personal data. What the Committee wishes to obtain is documentation which enables it to verify, for each of the systems under consideration, the content of the various benefits provided under the system for the reimbursement and the subcontracting of services and that they are compatible with those enumerated in Article 10, paragraph 1, of the Convention. The Committee therefore requests the Government to provide information on the measures adopted to give effect to section 89, second subsection (III), of the Social Security Act, under the terms of which “the persons, enterprises or entities to which this section refers shall be obliged to provide the Institute with any reports and medical or administrative statistics that it may require and comply with the instructions, technical standards, inspections and supervision prescribed by the Institute, under the terms of the rules governing the provision of medical care. It also requests the Government to supply, where appropriate, copies of inspection reports on this subject.

2. Part V (Old-age benefit), Articles 28, 29 and 30 of the Convention. 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 to workers who fulfil the age conditions and the qualifying periods set out in section 162 of the Social Security Act the provision of a “guaranteed pension”, the amount of which is equivalent to the general minimum wage for the Federal District. In this respect, the Government indicates that the amount of the guaranteed pension is increased annually in the month of February in accordance with the fluctuations observed the previous year in the National Consumer Price Index, with the purpose of maintaining the purchasing power of the pension in accordance with fluctuations in the prices of goods and services. The Committee notes this information. It also notes the detailed statistical data provided in the manner indicated in the report form approved by the Governing Body under Article 66 of the Convention, Titles I and III. The Committee observes that, according to the above information, the amount of the minimum guaranteed pension for 2005 was equivalent to 30.82 per cent of the wage of the ordinary adult male labourer, selected in accordance with the provisions of Article 66 of the Convention. The Committee draws the Government’s attention to the fact that the above percentage – 30.82 per cent – in respect of old-age benefit, is considerably lower than the minimum percentage prescribed by the Convention (40 per cent of the reference wage for a standard beneficiary). The Committee therefore hopes that the Government will adopt the necessary measures to raise the minimum guaranteed amount so that it is equivalent to the minimum percentage prescribed by the Convention.

3. (a) In its previous comments, the Committee requested the Government to indicate the total average percentage of the commissions charged, including the average applied to the capital and the average applied to the wage, in relation to the average wage of a standard man and woman beneficiary. In its report, the Government indicates that the commissions charged on the tripartite contributions for retirement, cessation of work at an advanced age and old age (RCV) are expressed as a percentage of the basic wage used for calculation (SBC), which is the wage on which the contribution is determined, and are equivalent to 6.5 per cent of the worker’s wage. The commission on contributions is not applied to the social contribution paid by the Government, which is equivalent to 2 per cent of the wage of an average worker. The commissions on capital are expressed as a fixed annual percentage and applied to the capital balance administered by the AFORES and invested in specialized retirement fund investment companies (SIEFORES), which excludes the capital in the housing sub-account. To obtain the total percentage of commissions on contributions and on capital in relation to the amount of the wage, it is necessary to project in time the contributions and commissions of the AFORES, based on the real rate of return on the workers’ funds. In May 2006, the equivalent commission on the average contributions to AFORES over 25 years, for an average worker, was 1.38 per cent of the wage. According to the information provided by the Government, the intense competition between AFORES has resulted in a significant fall in the rates of commissions. Between June 2001 and May 2006, there was a fall of 37.3 per cent in the indicator for equivalent commissions on contributions over 25 years. The Committee notes the above information. It requests the Government to provide information, including statistics and, where appropriate, reports of the supervisory bodies, indicating the average percentage which has in practice been used for the payment of commissions, on both contributions and capital, since the entry into force of the Act.

(b) With regard to the question of whether, when determining the level of commissions, consideration was given, in accordance with Article 71, paragraph 1, of the Convention, to their impact on persons of small means, the Committee notes that the new system of pensions has not involved an increase in the contributions paid by workers and employers. With the change of the system and the adoption of the system of individual accounts, a new contribution was established at the charge of the Government, known as the social contribution, which is more favourable to workers with lower wages as it consists of a fixed amount for each day of contributions. At the same time and to reinforce the system’s characteristic of solidarity, the guaranteed pension was established, which offers protection to workers with modest financial means and is paid through general taxation. Furthermore, under the terms of section 37 of the Retirement Systems Savings Act, AFORES may only charge commissions on a percentage of the value of the capital administered and on contributions, or a combination of both. As a result of charging commissions as percentages of wages and capital, and of excluding the social contribution from this charge, workers with modest financial means in practice pay less for the administration of their account than workers with greater means. The same section explicitly provides that AFORES may in no case charge fixed amounts for the administration of accounts, in view of the regressive nature of this type of charge.

(c) In its previous comments, the Committee noted that the basic capital for the provision of invalidity, life and employment injury pensions which is transferred to the insurance company for the provision of a lifetime annuity is calculated in accordance with the mortality tables for invalids by age and by sex. In reply to its previous comments, in which the Committee requested information disaggregated by age and sex on the amount of the commissions charged by AFORES (“programmed retirement”) and insurance companies (lifetime annuities) during the passive period, the Government indicates that, as of the month of May 2006, AFORES had not recorded the payment of any “programmed retirement” benefits, for which reason no commissions had been charged. The Committee notes this information. It requests the Government to provide the information requested in relation to lifetime annuities. With regard to the basic capital transferred to insurance companies, the Government indicates that it includes the savings accumulated by the worker up to the date on which the contingency occurs. The basic capital is composed of resources from the individual account and the amount insured, which is covered by the IMSS with resources from employers’ contributions to the employment risks insurance scheme. The Committee notes this information. Taking into account the fact that, in accordance with the national legislation, the financing of employment risks is at the charge of the employer, the Committee requests the Government to indicate the provision of the national legislation establishing that the savings fund of the worker can be used to contribute to the financing of a benefit.

4. 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 indicates that, due to the recent change to a fully-funded system, persons who draw pensions under the retirement, cessation at an advanced age and old-age scheme, have not accumulated sufficient resources in their individual accounts to finance the respective pension. Nevertheless, workers who were first insured under the Social Security Act of 12 March 1973, only require 500 weeks of contributions, equivalent to ten years of contributions, to be entitled to this benefit. With regard to workers covered by the new Social Security Act, who fulfil the conditions referred to in Article 29, paragraph 2, of the Convention, the Government indicates that the prospects for the development of the fully funded system in terms of the resources accumulated are still not sufficient to allow the financing of a reduced old-age benefit, in view of the fact that the reform of the pensions system is relatively recent. Nevertheless, there is sufficient time to develop firmer projections of the accumulation of resources under the new system and, where appropriate, to analyse possible supplementary sources of financing for a reduced benefit, and also to propose other solutions. The Committee notes this information. It hopes that the Government will be able to re-examine the situation and indicate the measures adopted or envisaged to secure the provision of a reduced old-age benefit to all persons protected who have 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 matter.

5. Part XIII (Common provisions). (a) Financing (Article 71). The Committee notes the information on the financing of benefits. It requests the Government to indicate the manner in which effect is given to Article 71, paragraph 2, of the Convention in the case of employment injury benefits, in so far as the capital accumulated in the individual accounts of workers contributes to the financing of such benefits, under the terms of sections 58 and 64 of the Social Security Act. The Government indicates that the capital withdrawn from the individual account for the financing of the pension is commensurate with the percentage of the degree of permanent incapacity. For example, where an insured person is evaluated at 30 per cent incapacity, no more than 30 per cent of the total capital in the account on the date of the commencement of the pension will be withdrawn, and such resources serve to finance the pension, with the difference to reach the basic capital required for the provision of the pension being provided by the IMSS through the amount insured. The Government adds that, in view of the relatively brief period since the reform of the pensions system, the accumulation of capital in workers’ individual accounts is still relatively insignificant for participation in contributing the basic capital, with the result that this type of benefit is covered by the amount insured through employers’ contributions. The Committee requests the Government to indicate the source of the resources under each system considered for each of the Parts of the Convention accepted, with an indication in particular of the rate or the level of the amounts deducted from earnings to finance each system, either through contributions or taxation. As employment injury benefits are covered by a specific branch, please indicate the level of resources allocated for the financing of such benefits.

(b) Administration and control of the social security system (Articles 71, paragraph 3, and 72, paragraph 1). In its previous comments, the Committee emphasized the need to undertake a global actuarial evaluation of the whole social security system. As the Government has not replied to the Committee’s previous comments in this respect, the Committee is bound to emphasize that, to ensure the full application of Article 71, paragraph 3, the above evaluation must cover the various pension schemes, including and 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 former and the new social security systems, encompassing the responsibilities of the IMSS, the INFONAVIT and the SAR in terms of financing and liabilities and all items of expenditure, including collection, administration, supervision and control. The Committee considers that the viability and sustainability of the system depend on a detailed analysis of the real and foreseeable development of the system as a whole. Indeed, this is of the very essence in an actuarial study. Only a global actuarial evaluation of the system will make it possible to estimate the contingent deficits to be underwritten by the State and to make the corresponding forecasts. It therefore requests the Government to take the necessary measures to give effect to this provision of the Convention and to provide information on the progress achieved in this respect.

6. Communications from representative organizations on the application of the Convention. The Committee notes the communication dated 8 March 2005 from the Independent Trade Union of Workers of the National Consumer Protection Office (SITPROFECO), and the Government’s reply dated 11 September 2006.

The SITPROFECO draws attention to the failure of the IMSS to take legal action to regularize the situation of over 27,000 women workers in the AVON company who were registered with the compulsory social security scheme until the end of 2004, thereby failing to give effect to the Convention. It indicates in this respect that, as from 14 November 2004, the AVON company took unilateral action to disaffiliate 23,627 women workers in the enterprise from the compulsory social security scheme, and exerted pressure for them to give up their employment status, which constitutes a violation of industrial relations.

The Government indicates that the IMSS took legal action to regularize the situation of the women working on commission with the compulsory social security scheme. It refers to Accord No. 278/2004 dated 23 June 2004, adopted by the Technical Council of the IMSS, under the terms of which, in accordance with section 285 of the Federal Labour Act, in conjunction with sections 20 and 21, commercial agents, including agents working on commission under the domination of “representatives”, shall be considered as workers in the enterprises for which they provide their services, where their relationship is of a permanent nature, and are therefore liable to coverage by the compulsory scheme established by section 12(1) of the Social Security Act.

The Government adds that the unilateral action of AVON to disaffiliate a large number of its workers from the compulsory social security scheme, and to exert pressure on them to renounce their employment status, constitute aspects of the employment relationship between the enterprise and its women workers engaged on commission which, in its view, are not related to the Convention. It further considers that in the area that lay within the competence of the IMSS at that time, the women workers, including women workers engaged on commission, were covered by social security in accordance with the Social Security Act, as a result of which there was no violation of the Convention.

The Government further notes that the Mexican legal system has established the necessary legal procedures, which can be used by workers in defence of their interests. It is therefore the responsibility of the representatives working on commission or the commercial agents concerned to pursue their rights under the labour and social security legislation individually or collectively in the respective courts through the corresponding legal action.

The Committee notes the Government’s statement. The Committee considers that, in general, workers should not be compelled to have recourse to the labour inspectorate or the courts to uphold their rights to coverage by the social security and, where appropriate, to receive the corresponding benefits; in the event of the failure of employers to comply with their obligations, it is the responsibility of the State to adopt all the necessary measures to ensure that such benefits are provided in practice, in accordance with Article 71, paragraph 3, and Article 72, paragraph 2, of the Convention. The Committee recalls that, under the terms of these provisions, the State shall accept general responsibility for the due provision of the benefits provided in compliance with the Convention and for the proper administration of the institutions and services concerned in the application of the Convention, and that it accordingly has to adopt, wherever necessary, all the appropriate measures to achieve this objective.

The Committee therefore considers that, in addition to its role in facilitating social dialogue, it is the responsibility of the State, as indicated by the Government, to ensure compliance in practice with the guarantees and rights enjoyed in accordance with the national legislation, namely article 123 of the Political Constitution of the United States of Mexico, the Federal Labour Act and the Social Security Act.

The Committee also expresses concern at the pressure exerted by the AVON company on the women workers to renounce their employment status, thereby depriving them of their entitlement to compulsory coverage by the social security scheme. It considers that the Government should adopt energetic measures to combat contractual agreements which conceal the real legal existence of an employment relationship. It therefore hopes that the Government will provide information on: (a) the inspections carried out by the IMSS to ascertain, in accordance with section 251(XI) of the Social Security Act, the termination of the condition which gave rise to the insurance coverage of the women workers whom the AVON enterprise disaffiliated; (b) the measures adopted by the Social Security Registration and Contribution Directorate to ascertain, in accordance with point 4 of Accord No. 278/2004, whether the women workers dismissed by the AVON company are covered by the exceptions envisaged in section 285 of the Federal Labour Act; (c) the measures adopted, in accordance with point 3 of the Accord, to establish a programme for dissemination and compliance with the terms of the Accord; and (d) the number of inspections undertaken, infringements reported and, where appropriate, penalties applied.

The Committee is addressing a request directly to the Government seeking additional information.

[The Government is asked to reply in detail to the present comments in 2007.]

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With reference to its previous comments, the Committee notes the information provided by the Government in its report. It notes with interest the information on the application of Part II (Medical care), Article 10, paragraph 1(b)(ii), Part VI (Employment injury benefit), Articles 35 and 36; Part VIII (Maternity benefit), Article 49, paragraph 2(b); Part XIV (Miscellaneous provisions), Article 76, paragraph 1(b), in relation to Articles 9, 15, 27, 33, 48, 55 and 61. It once again requests the Government to provide additional information on the following points.

Part VI (Employment injury benefit). 1. Article 34. In its previous comments, the Committee requested the Government to indicate in what manner and under which provisions the medical care which must be provided to victims of employment injuries includes, in accordance with Article 34 of the Convention, dental care (point (b)), nursing care at home (point (c)), maintenance in hospitals, convalescent homes, sanatoria or other medical institutions (point (d)), dental supplies, eyeglasses and prosthetic appliances (point (e)) and care furnished by members of such other professions as may be recognized as allied to the medical profession (point (f)). In its report, the Government indicates that section 56 of the Social Security Act, and the corresponding section 7 of the Regulations on medical services, provide that in the event of an employment risk, insured persons shall be provided with: medical, surgical and pharmaceutical aid, care in hospitals, artificial limbs and prosthetic appliances, and rehabilitation. It adds that, despite the fact that the above provisions do not specify care at home, such care is provided where required. The Committee notes this information. However, it observes that, under the terms of section 29(b) and (d) of the Social Security Act, which refer to section 15(I) of the above Regulations, sickness and maternity insurance does not cover the provision of eyeglasses or dental care, with the exception of extractions, fillings and cleaning. The Committee therefore hopes that the Government will take the necessary measures to ensure the provision, in accordance with Article 34(c) and (e) of the Convention, of dental care and eyeglasses. It also hopes that in due time a clause will be included in the legislation explicitly requiring the provision of care at home.

2. Article 36, paragraph 3(b). With reference to the Committee’s previous comments, the Government reiterates that, in accordance with section 58 of the Social Security Act, periodical payments due in the event of employment injury, where a worker suffers partial permanent incapacity of between 25 and 50 per cent, may be converted into a lump sum. The conversion of periodical payments into a lump sum is optional where the capacity is greater than 25 per cent and less than 50 per cent. The Committee notes this information. However, it notes that where the insured person opts for a lump sum, she or he is not required to provide guarantees concerning the utilization of such a sum. In these conditions, the Committee hopes that the Government will take the necessary measures to permit the competent authorities, in accordance with this provision of the Convention, to satisfy themselves that the beneficiaries will use the lump sum properly.

Part XI (Standards to be complied with by periodical payments), Article 65 in relation with Articles 16, 36, 50, 56, 57, 62 and 63. 1. With reference to the Committee’s previous comments, the Government indicates that it will follow the requests of the Committee with regard to the statistics on periodical payments. In view of the fact that the Government has had recourse to paragraph 6(d) of Article 65 in determining the skilled manual male employee, the wage of a skilled manual male employee must be equal to 125 per cent of the average earnings of all the persons protected. It requests the Government to provide the statistical information requested in the report form under Article 65 of the Convention, with an indication of the manner in which the average earnings of all the persons protected have been calculated.

2. With reference to its previous comments, the Committee notes the statistical data on the readjustment of old-age, invalidity and survivors’ benefit, as well as the benefits provided in the event of employment injury under the former pay-as-you-go system. It requests the Government to provide the statistics requested in the report form under the Title VI for Article 65, paragraph 10, of the Convention.

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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 observations made by the Confederation of Industrial Chambers of the United States of Mexico (CONCAMIN) on the application of the Convention, which were transmitted by the Government with its report.

The Committee requests the Government to provide further information on the following points.

Part II (Medical care). In its previous comments, the Committee noted 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; or (III) indirectly, through the conclusion of agreements with enterprises with their own medical services. In its report, the Government indicates that the IMSS through this procedure transfers responsibility for the provision of care to those entitled to it to another legal entity, which provides care under the same conditions as the IMSS. This transfer is an instrument allowing the IMSS to provide care to insured persons where it has no adequate infrastructure. In the above manner, the IMSS gives full effect to section 89 of the Social Security Act and consequently to the Convention. Section 89 above is intended to make available to workers flexible insurance schemes and thereby provide the majority of the persons protected with health-care coverage. The Committee notes this information. It also notes the amounts charged by the above services, the number of agreements and contracts concluded with service providers and the reimbursement agreements, as well as the number and principal characteristics (sex, sector of activity, geographical distribution, income levels, etc.) of the insured persons covered by such transfers. The Committee requests the Government to provide copies of agreements for the transfer of responsibility for the provision of services concluded with service providers (care providers in the private sector), as well as copies of reimbursement agreements and agreements for the provision of care concluded with enterprises with their own medical services and with the other institutions referred to in the report.

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 periods set out in section 162 of the Social Security Act the provision of a "guaranteed pension", the amount of which is equivalent to the general minimum wage for the Federal District. In this respect, the Committee notes that the standard beneficiary is determined on the basis of Article 66, paragraph 5, of the Convention. It requests the Government to provide the statistical data requested in the report form approved by the Governing Body under Article 66 of the Convention, Titles I and III.

2. (a) The Committee notes the detailed information provided by the Government in its report on the various commissions charged by the retirement fund administration companies (AFORES) and by insurance companies. It notes that the accumulated commissions charged by AFORES, both on contributions and on capital, would amount to 11.2 per cent of the capital accumulated over 25 years by a worker receiving the average wage. It requests the Government to indicate the total average percentage of the commissions charged, including the average applied to the accumulated capital and the average applied to contributions, in relation to the average wage of a standard man and woman worker. It also requests it to indicate whether, in determining the amount of commissions, account has been taken, in accordance with Article 71, paragraph 1, of the Convention, of their impact on persons of small means. It requests the Government to provide information disaggregated by sex on the amount of the commissions charged by the AFORES ("programmed retirements") and insurance companies (lifetime annuities) during the passive period, that is from the time that the pension is paid (lifetime annuity) periodically on the pension received (lifetime annuity or "programmed retirement") or on the capital accumulated by the pensioner ("programmed retirement").

(b) In reply to the Committee’s previous comments on the methods used for the calculation of pensions, the Government indicates that in the case of invalidity, life and employment injury insurance, the insurance companies provide benefits to both men and women workers in accordance with the amounts established in the Social Security Act, based on the wage. The basic capital transferred to the insurance company for the provision of a lifetime annuity is calculated in accordance with mortality tables for invalids by age and by sex. The Committee notes this information. In view of the fact that employment injury insurance is financed wholly by the employer, it requests the Government to indicate whether the capital amount transferred to the insurance companies includes the savings accumulated by the worker at the date on which the injury occurred (see the comments made under Article 71, paragraph 2, of the Convention).

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 reiterates 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 a single transaction, or continue to pay contributions to complete the missing weeks in order to qualify for a pension. Where the insured person has paid contributions for 750 weeks, she or he is entitled to benefits in kind under the sickness and maternity insurance scheme. Workers who have paid at least one contribution to the former pay-as-you-go system maintain the rights provided for under the repealed Act. Insured persons registered prior to the coming into force of the new Social Security Act can opt to be covered either by the pay-as-you-go scheme or the fully funded scheme. The seniority requirements for entitlement to an old-age pension or a pension for termination of employment at an advanced age for all transition workers is 500 weeks of contribution, which is a shorter period than that envisaged in Article 29, paragraph 2, of the Convention. The Committee notes this information. However, it is bound to emphasize that, with regard to the fully funded scheme, 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 furthermore 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 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. Part XI (Standards to be complied with by periodical payments), Articles 65, paragraph 10, and 66, paragraph 8 (Review of benefits). In its previous comments, the Committee noted the information provided by the Government on fluctuations in the cost-of-living index, earnings and benefits, which showed that, with the exception of survivors’ benefit, effect was given to these provisions of the Convention requiring the adjustment of long-term benefits for all contingencies. However, according to the statistics provided, the increase in survivors’ benefit between May 1997 and June 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 Committee notes the information provided by the Government in its last report to the effect that the increase in survivors’ benefit appears to meet the requirements of the Convention. However, it wishes to draw the Government’s attention to the fact that the statistical information provided in its last report does not coincide for the same period with the data provided in the report covering the period 1997-2000. The Committee would therefore be grateful if the Government would clarify this situation and provide up-to-date information in this respect.

Part XIII (Common provisions). 1. Financing (Article 71). The Committee notes the information concerning the financing of benefits. It requests the Government to indicate the manner in which effect is given to Article 71, paragraph 2, of the Convention in the case of employment injury benefits in so far as the capital accumulated in the individual accounts of workers contributes to the financing of such 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. It notes with interest the Financial and Actuarial Report of the Mexican Institute, approved by the General Assembly of the IMSS on 30 August 2000. However, it notes that there is no overall actuarial report for the whole system. In view of the fact that the State is responsible for the general functioning of the system as a whole, the Committee emphasizes the need to carry out an overall actuarial evaluation of the whole system. In order to give full effect to Article 71, paragraph 3, the above evaluation must cover the various pensions schemes, including and 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 former and the new social security systems, encompassing the responsibilities of the IMSS, the INFONAVIT and the SAR in the financing and the liabilities and all items of expenditure, including collection, administration, supervision and control. The Committee considers that the viability and sustainability of the system depend on a detailed analysis of the real and foreseeable development of the system as a whole. Indeed, this is of the very essence in an actuarial study. Only a global actuarial evaluation of the system will make it possible to estimate the contingent deficits to be underwritten by the State and to make the corresponding forecasts.

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 it has entrusted the administration of AFORES and Companies Specializing in the Investment of Retirement Funds (SIEFORES) to institutions regulated by a public body, such as the National Commission for the Savings System (CONSAR). It is therefore the Government’s opinion that paragraph 1 of Article 71 of the Convention is not applicable. The Government accordingly considers that sections 29 and 49 of the Retirement Savings Act of 23 May 1996 give full effect to these Articles of the Convention. The Committee notes this statement. It wishes to point out that section 2 of the above Act does not appear to envisage the administration of individual accounts among the functions of CONSAR. This function is attributed, under section 18 of the Act, to the AFORES. In view of the fact that sections 29 and 49 of the Act do not specify that the independent advisers represent the interests of the workers, the Committee requests the Government to indicate the measures that it intends to adopt to allow the participation of the persons protected in the management of AFORES and of SIEFORES, as well as of insurance companies.

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With reference to its observation, the Committee would be grateful if the Government would provide additional information on the following points.

Part II (Medical care), Article 10, paragraph 1(b)(ii), and Part VIII (Maternity benefit), Article 49, paragraph 2(b), of the Convention.  Please indicate whether the obstetrical treatment provided during pregnancy, confinement and their sequelea under the terms of section 94(1) of the Social Security Act include hospitalization where it is recognized as being necessary, in accordance with the above provisions of the Convention.

Part VI (Employment injury benefit).  1.  Article 34.  Please indicate whether, in what manner and under which provisions the medical care which must be provided to victims of employment injury includes, in accordance with Article 34 of the Convention, dental care (point (b)), nursing care at home (point (c)), maintenance in hospitals, convalescent homes, sanatoria or other medical institutions (point (d)), dental supplies, eyeglasses and the repair of prosthetic appliances (point (e)) and the care furnished by members of such other professions as may be recognized as allied to the medical profession (point (f)).

2.  Article 35.  The Committee notes that the information provided by the Government under this provision of the Convention and sections 80 and 81 of the Social Security Act, to which it refers, relate to the prevention of occupational risks and not to vocational rehabilitation. The Committee hopes that the Government’s next report will indicate the manner in which effect is given to Article 35 of the Convention, which concerns the cooperation between competent institutions in relation to vocational rehabilitation.

3.  Article 36, paragraph 3(b).  The Committee notes the information provided in the Government’s report. It understands from the text of section 58 of the Social Security Act, respecting cash benefits due in the event of employment injury that, where a worker suffers incapacity of between 25 and 50 per cent, he or she may either apply for the payment of a pension for partial incapacity or request the conversion of the pension into a lump sum. The Committee would be grateful if the Government would indicate whether this is indeed the case. Please also indicate whether, in the event that the insured person opts for the payment of the pension in the form of a lump sum, she or he has to provide the competent authorities with guarantees of its proper utilization, in accordance with the requirements of Article 36, paragraph 3(b), of the Convention.

4.  Article 38.  The Committee notes that section 62 of the Social Security Act provides that, where the victim of an employment injury who benefited from a pension for permanent total or partial incapacity subsequently, following rehabilitation, takes up remunerated work once again and receives a wage equivalent to at least 50 per cent of the previous earnings, she or he loses entitlement to the pension. The Committee requests the Government to provide additional information on the implementation in practice of this provision of the Social Security Act, with an indication of whether it also applies in the event of partial rehabilitation.

Part XI (Standards to be complied with by periodical payments), Article 65 in relation with Articles 16, 36, 50, 56, 57, 62 and 63.  The Committee notes the detailed information provided by the Government and the statistics on the level of sickness benefit, the benefit provided in the event of employment injury, and maternity, invalidity and survivors’ benefit, which demonstrate that the level of these benefits prescribed by the Convention is in theory attained. The Committee notes that the Government has recourse to the level of the wage of a skilled manual male employee as set out in Article 65, paragraph 6(d), of the Convention. In this respect, the Committee wishes to emphasize that, according to this provision of the Convention, the wage of a skilled manual male employee must be equal to 125 per cent of the average earnings of all the persons protected, and not 125 per cent of the average earnings subject to a ceiling of all the persons protected. The Committee hopes that the Government will take into account in future the above comments when it provides the statistics required by the report form under Article 65 of the Convention.

Part XIV (Miscellaneous provisions), Article 76, paragraph 1(b), in relation with Articles 9, 15, 27, 33, 48, 55 and 61.  The Committee notes the statistical information provided by the Government on the scope of the social security system for the Parts of the Convention which have been accepted by Mexico. It would be grateful if the Government would indicate whether the statistics that it provided in its report include agricultural workers, in accordance with the Convention.

Furthermore, in view of the fact that the number of persons who benefit from compulsory coverage by the Mexican Social Security Institute in relation to the total number of employees barely attains the level of 50 per cent prescribed by the Convention (except for certain branches, where this percentage is somewhat higher), the Committee requests the Government to provide information, including statistics, on the number of workers covered by systems other than that provided by the IMSS, with a brief description of the protection from which they benefit. Please also indicate whether the statistics provided in the report include workers employed by the IMSS, who are covered by a special scheme.

With regard to the transitional provisions respecting persons who were already insured under the Mexican Social Security Institute before the coming into force of the new Social Security Act, the Government refers to the eleventh and twelfth sections of the transitional provisions of the Social Security Act. The Committee would be grateful if the Government would provide additional information on the implementation in practice of these provisions, with an indication of any difficulties or disputes to which their application may have given rise. Please also provide practical examples for the various circumstances which may arise.

Finally, the Committee would be grateful if the Government would provide the information requested on the adjustment of old-age, invalidity and survivors’ benefits, as well as the benefits provided in respect of employment injury under the previous pay-as-you-go system, with the statistics on these benefits requested by the report form under Article 65, paragraph 10, of the Convention.

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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.

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With reference to its previous comments, the Committee recalls that, following the coming into force of the new Social Security Act of 1 July 1997, which concerns in particular the branches for which Mexico has accepted the provisions of the Convention, the Mexican social security system has undergone far-reaching changes, especially with regard to pensions. In this respect, the Committee also notes the Act respecting retirement savings systems of 25 April 1996 and the regulations issued thereunder. The new legislation associates the private sector with the achievement of the objectives pursued by social security. Subject to certain transitional measures, workers who are insured under the Mexican Social Security Institute now have to open an individual account with a retirement fund administration company (AFORES) of their choice. This individual account receives the contributions paid by the worker, the employer and the State. Retirement fund administration companies are the financial entities with the exclusive responsibility of managing the individual accounts of their insured persons and are subject to authorization by the National Commission of the Retirement Savings System. AFORES invest the resources placed in the individual accounts through companies which specialize in the investment of retirement funds (SIEFORES). These latter must also obtain authorization from the above Commission, which is also responsible for supervising their activities and those of the AFORES. These companies earn commissions which are debited to the individual accounts of workers. At the time of their withdrawal, workers convert the balance of their individual account into a pension which may take the form of an annuity or a programmed retirement pension. The resources accumulated in the individual accounts also serve to finance invalidity and survivors' benefits. Workers may also, under certain conditions, withdraw amounts from their individual accounts for specific purposes (marriage, unemployment, etc.). Furthermore, the State guarantees a minimum pension, the monthly amount of which is equivalent to the general minimum wage for the federal district.

The Committee also recalls that the new Mexican social security system was the subject of a communication received in June 1997 from a group of workers' organizations which consider that the reform of the social security system is prejudicial to workers and their families and suppresses certain fundamental rights, including the guarantee of full health protection. These organizations also refer to the risks implied by the new system of individual capital accumulation and the private administration of pensions, as well as the deterioration of health services. The increase in the qualifying period for entitlement to a retirement pension is also criticized by these organizations. These observations were transmitted to the Government in August 1997.

The Committee has examined the report provided by the Government for the period 1996-1997 in the light of the new legislation. It notes that this report, which contains a detailed description of the new provisions of the Social Security Act, does not include all the information, and particularly the statistics, which are necessary for it to make a full assessment of the manner in which the new legislation ensures the application of the Convention.

The Committee therefore wishes to draw the Government's attention to and/or be provided with information on the following points. It also hopes that the Government will not fail to provide the information that it considers necessary in response to the observations made by the above workers' organizations.

I. Level and duration of benefits

1. Sickness benefit (Article 16) and maternity benefit (Article 50) of the Convention. The Committee notes that under section 92 of the Social Security Act, sickness benefit is set at 60 per cent of the last wage subject to contributions. Maternity benefit is equal to the last wage subject to contributions under the terms of section 101 of the Social Security Act. In its report, the Government refers to Article 66 of the Convention for the calculation of sickness benefits. In this respect, the Committee reminds the Government that, since sickness and maternity benefit are, in accordance with the Social Security Act, dependent on the previous earnings of the beneficiary, Article 65 of the Convention is applicable. In these conditions, the Committee would be grateful if the Government would indicate in its next report whether, and if so under which provisions, the wage that is subject to contributions and/or the level of sickness and maternity benefit are subject to a ceiling. If so, it requests the Government to provide all the statistics required by the report form under Article 65 (Titles I, II and V).

2. Old-age benefits (Articles, 28, 29 and 30). (a) The Committee recalls that, according to these provisions of the Convention, read in conjunction with Part XI (Standards to be complied with by periodical payments), the level of the old-age benefit shall be equivalent to 40 per cent of the reference wage for a standard beneficiary who has completed a qualifying period which may be 30 years of contribution or employment, or 20 years of residence. This level of benefit must be granted throughout the contingency, irrespective of the type of pension selected (annuity or programmed retirement). The Committee notes that, for persons who fulfil the qualifying conditions for an old-age pension set out in the legislation, the level of the benefit would not appear to be determined in advance, but depends on the capital accumulated in the individual accounts of workers, and particularly on the return obtained on that capital. 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 Act with a "guaranteed pension", the amount of which is equivalent to the general minimum wage for the federal district. In these conditions, the Committee hopes that the Government will be able to provide with its next report all the statistics requested in the report form under Article 66, in order to enable it to determine whether in practice the minimum amount of the old-age pension attains the percentage required by the Convention.

(b) The Committee requests the Government to indicate the manner in which the application of Article 30 of the Convention (payment of the benefit throughout the contingency) is ensured for the "programmed retirement" method, as set out in section 159 of the Social Security Act. Please indicate in particular whether, once the accumulated capital in the individual account is exhausted, the beneficiary is entitled to receive the "guaranteed pension" envisaged in section 170 of the Social Security Act.

(c) The Committee notes that, under section 162 of the Social Security Act, workers are entitled to an old-age pension when they reach the age of 65 years and have completed a minimum qualifying period of 1250 weeks of contribution. The Committee requests the Government to indicate in its next report the manner in which effect is given to Article 29, paragraph 2(a), of the Convention, which provides that a reduced 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.

3. Employment injury benefit (Article 36), invalidity benefit (Articles 56 and 57) and survivors' benefit (Articles 62 and 63). The Committee would be grateful if the Government would provide all the statistical information required by the report form on the calculation of benefits required under Article 65 (Titles I, II and IV).

Furthermore, the Committee notes that, under the terms of section 141 of the Social Security Act, the invalidity pension for workers who have completed the qualifying period set out in section 122 is equivalent to 35 per cent of the average wage paid during the 500 weeks prior to the provision of the pension, adjusted in accordance with the national consumer price index. The amount of the benefit is increased, among other elements, by family benefits. The amount of the survivors' benefit provided to a standard beneficiary (widow with two children) is also 35 per cent of the above wage, under the terms of sections 131, 135 and 144 of the Social Security Act. The Committee recalls in this respect that, in accordance with the above provisions of the Convention, in conjunction with Part XI (Standards to be complied with by periodical payments), the invalidity benefit, increased by the amount of any family allowances, provided to a standard beneficiary (man with wife and two children) shall be at least 40 per cent of the previous earnings and family allowances received by the beneficiary when he was working. The amount of the widow's pension must also, for a standard beneficiary (widow with two children), be 40 per cent of the previous earnings of the family breadwinner (including the family allowances payable both during employment and during the contingency).

However, the Committee notes that both the invalidity pension and the widow's pension may not be lower than the "guaranteed pension", which is equal to the general minimum wage for the federal district (sections 141 and 170). In these conditions, the Government may wish to refer to the provisions of Article 66 of the Convention, to which it may also have recourse, and the Committee requests it to provide with its next report all the statistics required by the report form under this provision of the Convention (Titles I, II and IV).

II. Adjustment of benefits (Articles 65, paragraph 10, and 66, paragraph 8)

The Committee notes the information provided by the Government on the changes in the cost of living and minimum wage during the period covered by the report. In order to be able to fully assess the manner in which effect is given to these provisions of the Convention, which provide for the adjustment of long-term benefits to the cost of living or the general level of earnings, the Committee would be grateful if the Government would provide in its next report all the statistical information required by the report form under Article 65 (Title VI) including fluctuations in the cost of living, changes in the general level of earnings and changes in benefit levels (average per beneficiary and benefit for a standard beneficiary), as well as changes in minimum benefit levels.

III. Financing of benefits (Article 71, paragraphs 1 and 2)

The Committee notes the information concerning the financing of the various benefits. It requests the Government to provide in its next report the statistical information required by the report form under Article 71 (point 3) for the Parts of the Convention which have been accepted by Mexico.

IV. Administration and control of the social security system (Articles 71, paragraph 3, and 72, paragraph 1)

The Committee notes the information contained in the Government's report. It would be grateful if the Government would indicate the measures taken in practice to ensure the application of Articles 71, paragraph 3 and 72, paragraph 2, of the Convention. In this respect, it recalls the importance of undertaking periodical actuarial studies and calculations, as required by Article 71, paragraph 3.

V. Participation of protected persons in the administration of social security (Article 72, paragraph 1)

The Committee notes the information provided by the Government. It would be grateful if the Government would indicate in its next report whether and, if so, the manner in which the representatives of the persons protected participate in the administration of AFORES and SIEFORES, which form an integral part of the social security system.

VI. Coverage of the system (Articles 9, 15, 27, 33, 48, 55 and 61, in relation to Article 76(b)(i)

The Committee notes the information provided by the Government to the effect that the social security scheme applies in particular to all employees, among other persons. It would be grateful if the Government would provide in its next report all the statistical information required under Article 76, paragraph 1(b)(i), of the report form (Title I).

VII. Finally, the Committee would be grateful if the Government would provide detailed information with its next report on the implementation of the transitional measures with regard to persons who are already insured under the Mexican Social Security Institute before the coming into force of the new Social Security Act. Please also indicate the measures adopted, in accordance with Article 65, paragraph 10, of the Convention, to ensure the adjustment of old-age, invalidity and survivors' benefits, as well as employment injury benefit, which have been or will be provided under the former system of redistribution, by providing the statistics required by the report form under this Article of the Convention (Title VI).

[The Government is asked to report in detail in 2000.]

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The Committee notes the Government's report for the period from July 1996 to June 1997 which supplies information relating to the entry into force on 1 July 1997 of the new Social Security Act. The Government's report was received at the Office in November 1997. The Committee also notes a communication on the application of the Convention, sent by a group of workers' organizations, which was brought to the notice of the Government in August 1997. The Committee intends to examine at its meeting in 1998 the information supplied by the Government in its report as well as any observations it may wish to make on the matters raised by the workers' organizations. The Government is also requested to supply the text of any implementing regulations for the new Social Security Act.

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The Committee notes the adoption of the social security law of 12 December 1995 which enters into force 1 January 1997. It asks the Government to furnish in its next report the detailed information requested in the report form on the impact of this new legislation on each Article of the Parts of the Convention which Mexico has accepted. The Committee also asks the Government to supply the text of any regulations which have been adopted.

[The Government is asked to submit a detailed report in 1997.]

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1. The Committee notes the information supplied by the Government in its report. It notes in particular the information on the number of persons protected by the various insurance schemes (Part XIV (Miscellaneous provisions), Article 76, paragraph 1(b), of the Convention).

2. Part IX (Invalidity benefit), Article 57, paragraph 2, and Part X (Survivors' benefit), Article 63, paragraph 2, of the Convention. In reply to the Committee's previous comments, the Government indicates that the Institute of Social Security and Services for State Employees (ISSSTE) has been examining since 1989 proposed amendments which include the grant of invalidity or survivors' pensions to insured persons who have contributed for a minimum period of five years. However, financial difficulties in the current pensions system have kept these amendments from being implemented for the time being. The ISSSTE is firmly convinced that current efforts to strengthen the pension scheme will eventually ensure compliance with the requirements laid down in Articles 57, paragraph 2, and 63, paragraph 2, of the Convention. The Committee notes the Government's statement. While it is aware of the difficulties referred to by the Government, the Committee expresses the hope that the proposed amendments will be finalized, and that reduced invalidity and survivors' benefits will be granted to insured persons who have completed a period of five years of contribution, as required by the Convention.

3. Part XI (Standards to be complied with by periodical payments), Article 65 (in conjunction with Articles 16, 28, 36, 56 and 62):

(a) the Committee notes the information on the review of pensions. It asks the Government to provide the statistical information requested in the report form of the Convention adopted by the Governing Body, under Title VI of Article 65, and particularly data on changes in the amount of pensions, the cost of living index and the index of earnings for the same period of reference;

(b) the Committee again asks the Government to provide, in respect of persons covered by the compulsory IMSS Scheme, the statistical information requested in the report form referred to above, under Titles I to IV of Article 65 of the Convention, and particularly information on the amount of the wage of a skilled manual male employee (as defined in paragraphs 6 and 7 of Article 65) and on the amount of the benefits paid to a standard beneficiary in respect of the various branches of the Convention that have been accepted.

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I. The Committee notes the Government's reply to its previous comments and it has also been informed of the coming into force, in 1984, of the new Act respecting the State Employees' Social Security and Social Services Institute (ISSSTE), and the Regulations respecting cash benefits issued under the above Act. The Committee has examined this legislation and notes with interest the various improvements that have been made to the social security scheme for these workers, particularly with regard to the rates of long-term benefits and the possibility of granting old-age and survivors' pensions after ten years' contributions in certain cases of insured persons who are over 60 years of age.

II. With regard to the points raised in its previous comments, the Committee requests, firstly, that the Government refer to its observation and, secondly, wishes once again to draw attention to the following points:

(1) Part IX (Invalidity benefit), Article 57, paragraph 2 and Part X (Survivors' benefit), Article 63, paragraph 2, of the Convention. In its previous comments, the Committee pointed out that the legislation respecting the State Employees' Social Security and Social Services Institute (ISSSTE) does not provide for reduced invalidity and survivors' pensions to be granted to protected persons who have completed (either themselves or their family breadwinner, as appropriate) a minimum period of five years' contributions or employment, as required by the above provisions of the Convention.

In its previous reports, the Government indicated that it would examine the possibility of amending the above legislation to take into account the Convention. In its last report, it points out that the new Act respecting the ISSSTE does not amend the previous legislation in this respect, although it raises the amounts of the benefits in question. Although noting these improvements, the Committee is bound to turn once again to the question and hopes that it will be possible to take the necessary measures in the near future in order to bring the above legislation into full conformity with the Convention with regard to the point under consideration.

(2) Part XI (Standards to be complied with by periodical payments), Article 65 (in conjunction with Articles 16, 28, 36, 56 and 62). (a) The Committee notes with interest the information supplied in the report regarding the review of pensions as a function of the readjustment of the general level of minimum wages in the Federal District. The Committee requests the Government to continue supplying such information in each of its future reports and to formulate the appropriate statistical data, if possible, as indicated in the report form for the Convention, under Title VI, Article 65.

(b) The Committee would also be grateful if the Government would supply in each of its future reports the statistics set out in the above report form under Titles I-IV, Article 65 of the Convention, and particularly information regarding the wage of a skilled manual male employee (defined in accordance with paragraphs 6 and 7 of Article 65) and regarding the amount of the benefit provided during the period covered by the reports for a standard beneficiary for the contingencies covered by the various Parts of the Convention that have been accepted. This information should deal in particular with the general insurance scheme (1973 Social Insurance Act and its subsequent amendments).

(3) Part XIV (Miscellaneous provisions), Article 76, paragraph 1(b). The Committee notes that the Government's report contains no information on the number of persons protected by the various insurance schemes. The Committee hopes that this information will be supplied with the next report and that it will be compiled as indicated in the report form on the Convention under Title I or Title II, Article 76.

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Part X (Survivors' benefit), Article 64 of the Convention. With reference to its previous direct requests, the Committee notes with satisfaction that a new Act respecting the State Employees' Social Security and Social Services Institute (ISSSTE), which came into force on 1 January 1984, no longer contains a provision providing for the progressive decrease of survivors' pensions until they reach half their initial amount, as was the case in the previous legislation, which was contrary to the Convention.