Monday, March 26, 2007

Private Retirement Accounts in Mexico

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The centerpiece of the reform, which passed the lower house last week and is expected to pass the Senate this week, is the establishment of worker-owned, individual accounts to replace the communal pool at Issste. There are no changes for those already retired. Current workers will have the choice of staying with the government's defined-benefit plan and accepting gradual increases in the retirement age, or migrating to the new individual account, defined-contribution system.