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Employee Benefits in Mexico

  • January 2015
  • -
  • Timetric
  • -
  • 64 pages

Mexico’s social security system was introduced in 1942 and has since evolved in terms of scope and coverage. The Mexican Social Security Institute (IMSS) and the Institute for Security and Social Services for Government Workers (ISSSTE) are the governing bodies of social security system. The existing social security system was introduced on July 1, 1997 and is based on defined contributions instead of the earlier pay-as-you-go system. The system provides coverage for disability, death and retirement benefits. Individual accounts are created for employees and contributions made by employee, employer and government are credited therein.

The report provides in-depth industry analysis, information and insights into employee benefits in Mexico, including:

- An overview of state and compulsory benefits in Mexico

- Detailed information about private benefits in Mexico

- Insights into various central institutions responsible for the administration of the different branches of social security

- The regulatory framework of employee benefits in Mexico

This report provides a detailed analysis of employee benefits in Mexico:

- It offers a detailed analysis of the key government-sponsored employee benefits, along with private benefits.

- It covers an exhaustive list of employee benefits, including retirement benefits , death in service benefits, long-term disability benefits, short-term sickness benefits, medical benefits, workmen’s compensation, maternity and paternity benefits, family benefits, minimum resources, annual vacations, unemployment and private benefits.

- It highlights the economic and regulatory situations relating to employee benefits in Mexico.

Reasons To Buy
- Make strategic decisions using in-depth information related to employee benefits in Mexico.

- Assess Mexico’s employee benefits market, including state and compulsory benefits and private benefits.

- Gain insights into the key employee benefit schemes offered by private employers in Mexico.

- Gain insights into key organizations governing Mexico’s employee benefits, and their impact on companies.

Key Highlights
- Persons who joined the labor force prior to July 1, 1997 receive benefits according to the SAR (Sistema de Ahorro para el Retiro) or MIA (Mandatory Individual Account) system. If a person elects to receive benefits through MIA system, his or her SAR account balance is transferred to a new MIA. Persons who were employed on or after July 1, 1997 are provided MIA.

- Those employed by the state contribute 6.125% of their payroll towards retirement, unemployment in old age, disability, occupational risks and death benefits. The employer contributes 5.175% of the employee’s basic salary and the overall government contributes 5.5% of the minimum wage according to the federal district.

- Private benefits are employee benefits that are not mandated by law but are provided by the employer to increase employee motivation. With almost 70% of medium and large companies offering retirement plans, this is the most provided benefit.

Table Of Contents

Employee Benefits in Mexico
Table of Contents
1 Executive Summary
2 Introduction
2.1 What is this Report About?
2.2 Definitions
3 Country Statistics
4 Overview of Employee Benefits in Mexico
5 Regulations
6 State and Compulsory Benefits
6.1 Retirement Benefits
6.1.1 Introduction
6.1.2 Types of retirement plan
6.1.3 Eligibility
6.1.4 Age
6.1.5 Pensionable salary
6.1.6 Benefits
6.1.7 Payment options
6.1.8 Typical employer practice
6.1.9 Employee and employer contributions
6.1.10 Taxation
6.2 Death in Service
6.2.1 Introduction
6.2.2 Eligibility
6.2.3 Benefits
6.2.4 Payment options
6.2.5 Typical employer practice
6.2.6 Employee and employer contributions
6.2.7 Taxation
6.3 Long-Term Disability Benefits
6.3.1 Introduction
6.3.2 Eligibility
6.3.3 Benefits
6.3.4 Payment options
6.3.5 Employee and employer contributions
6.3.6 Taxation
6.4 Short-Term Sickness Benefits
6.4.1 Introduction
6.4.2 Eligibility
6.4.3 Benefits
6.4.4 Payment options
6.4.5 Typical employer practice
6.4.6 Employee and employer contributions
6.4.7 Taxation
6.5 Medical Benefits
6.5.1 Introduction
6.5.2 Eligibility
6.5.3 Benefits
6.5.4 Payment options
6.5.5 Typical employer practice
6.5.6 Employee and employer contributions
6.5.7 Taxation
6.6 Workmen's Compensation
6.6.1 Introduction
6.6.2 Eligibility
6.6.3 Benefits
6.6.4 Payment options
6.6.5 Employee and employer contributions
6.6.6 Taxation
6.7 Maternity and Paternity Benefits
6.7.1 Introduction
6.7.2 Eligibility
6.7.3 Benefits
6.7.4 Payment options
6.7.5 Employee and employer contributions
6.7.6 Taxation
6.8 Family Benefits
6.8.1 Introduction
6.8.2 Eligibility
6.8.3 Benefits
6.8.4 Payment options
6.8.5 Employee and employer contributions
6.8.6 Taxation
6.9 Minimum Resources
6.9.1 General System
6.9.2 Programa de Pensión para Adultos Mayores or Old-age assurance
6.9.3 Programa de Abasto Rural or Rural Supply Program
6.9.4 Programa d e Abasto Social de Leche or Social Milk Supply Program
6.9.5 Instituto Nacional de las Personas Adultas Mayores or National Institute of Older Persons
6.1 Annual Vacations
6.10.1 Introduction
6.10.2 Compulsory leave
6.10.3 Paid vacation
6.11 Unemployment
6.11.1 Introduction
6.11.2 Eligibility
6.11.3 Benefits
6.11.4 Payment options
6.11.5 Employee and employer contributions
6.11.6 Taxation
7 Private Benefits
7.1 Retirement Benefits
7.2 Disability Benefits
7.3 Death Benefits
7.4 Medical and Health Benefits
7.5 Other Benefits
8 Macroeconomic Indicators
8.1 Economic Performance
8.1.1 GDP at constant prices (US$)
8.1.2 GDP per capita at constant prices (US$)
8.1.3 GDP at current prices (US$)
8.1.4 GDP per capita at current prices (US$)
8.1.5 GDP by key sectors
8.1.6 Inflation rate
8.1.7 Annual average exchange rate US$-MXN
8.1.8 Unemployment rate
8.1.9 Household consumption expenditure
8.2 Demographics
8.2.1 Total population
8.2.2 Labor force
8.2.3 Urban and rural population
9 Appendix
9.1 Methodology
9.2 Contact Timetric
9.3 About Timetric
9.4 Timetric's Services
9.5 Disclaimer

List of Tables
Table 1: Definitions
Table 2: Mexico - Country Statistics, 2011-2014
Table 3: Minimum Wage in 2014
Table 4: Early Retirement Age for Government Workers With 30 Years of Contributions
Table 5: Early Retirement Age for Government Workers with 15 Years of Contributions
Table 6: Percentage of Wages for Basic Amount and Annual Increase
Table 7: Early Retirement Pension Percentage for Government Workers
Table 8: Unemployment Old-Age Pension
Table 9: Dependent's Supplement Pension
Table 10: Financial Aid to Children Pursuing Education
Table 11: Mandatory Holidays of Mexico
Table 12: Number of Paid Vacation Days
Table 13: Old-age Unemployment Benefits, 2010-2018

List of Figures
Figure 1: Major Institutions of the Mexican Social Security System
Figure 2: Mexican GDP at Constant Prices (US$ Billion), 2009-2013
Figure 3: Mexican GDP Per Capita at Constant Prices (US$), 2009-2013
Figure 4: Mexican GDP at Current Prices (US$ Billion), 2009-2013
Figure 5: Mexican GDP Per Capita at Current Prices (US$), 2009-2013
Figure 6: Mexican GDP by Key Sectors (%), 2008 and 2012
Figure 7: Mexican Inflation Rate (%), 2008-2013
Figure 8: Mexican Annual Average Exchange Rate US$-MXN, 2009-2013
Figure 9: Mexican Unemployment Rate (%), 2009-2013
Figure 10: Mexican Household Consumption Expenditure (US$ Billion), 2009-2013
Figure 11: Mexican Total Population (Million), 2009-2013
Figure 12: Mexican Size of Labor Force (Million), 2008-2012
Figure 13: Mexican Urban and Rural Population (%), 2009-2013

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