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Increase in the employer's contributions to the Retirement, Unemployment in Advanced Age and Old Age

As of January 1st, 2023, an increase in the Employer Fee (non-worker) in the Unemployment Insurance for the Elderly and Old Age (CEAV) will come into effect, in accordance with the Decree that reforms, adds and repeals various provisions of the Law on Social Security and the Law on Retirement Savings Systems, published in the Official Gazette of the Federation (DOF) on December 16th, 2020.

Said decree, through a transitory provision, among others, establishes the modification of the percentages of the employer's contribution in the branches of unemployment in advanced age and old age, being a gradual increase from 2023 to 2030, percentages that are applied to the Contribution Base Salary of the employee.

Let us remember that some of the main changes of the reform were the following:

1. Decrease in the requirement of weeks quoted.

To access a pension you need to have 1,000 weeks in the Compulsory Social Security Regime; The retirement age is maintained at 60 years due to unemployment at an advanced age —CEA— and at 65 due to old age (art. 154 and 162, LSS).

However, this requirement in 2021 begins at 750 weeks of contributions and increases by 25 weeks each year to accumulate the 1,000 weeks in 2031 (Fourth transitory article, Decree).

2. Withdrawal Options.

The insured with the right to a pension can choose between a life annuity, a programmed withdrawal or both options (art. 157 and 164, LSS).

3. Gradual increase in the employer contribution in accordance with the contribution base salary.

The contribution for CEA and old age will increase gradually from 2023 and in accordance with the contribution base salary —SBC— of each subordinate, reaching a ceiling of 11.875% of the SBC in 2030 (art. 168, section II, subparagraph a), LSS)

4. Increase and redistribution of the social quota granted by the government to low-income employees.

From the 1st. January 2023, a social quota will be granted for beneficiaries who receive up to four times the UMA. The amount of the social quota will be progressive (art. 168, fraction IV, LSS and Third transitory, Decree)

5. Modification to the amount of guaranteed pension.

The minimum amount of pension that a worker may receive upon retirement will range from 2,622.00 to 8,241.00 pesos. To determine the amount, the range of the average SBC received during his working life will be considered, which will be updated with the INPC on the date the insured person retires; the total number of weeks that he would have contributed and the age at which he retires —from the age of 60— (art. 170, LSS)

6. Changes in commissions charged.

The commissions charged by the Afores are subject to a maximum, which will be the arithmetic average of the commissions charged by the defined contribution systems of the United States, Chile and Colombia. If the average of these countries falls, the Afores will have to adjust to that figure; otherwise, they have to maintain the average already defined (art. 37, LSAR)

7. 10-year report.

In 2031, the Consar must send to the SHCP an analysis of the results obtained after the application of the pension reform (Article Seventh transitory, Decree).

According to the above, it is important to take into account, in the company's expense budget for 2023, this increase in this CEAV Employer Insurance fee and also clarify that this increase in percentages does not affect the worker (withholding), just the boss.


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