Mexican President Andres Manuel Lopez Obrador said Tuesday that he will be presenting a new fund, hoping to increase pensions from May 1 onward, ahead of upcoming presidential elections.
This fund creation is part of a pension reform proposed by the president in February and approved by the country's lower house on Monday. However, the reform is yet to get passed by the Senate.
"I hope that on May 1, Labor Day, we can present a report to workers and give them the good news, that their pensions are guaranteed and that they will also be increased," Obrador said, Reuters reported.
This move has not been received well by the opposition, raising concerns that the savings of workers managed by private companies could be endangered. However, the government denies this claim.
The administration plans to start by adding around 40 billion pesos to the fund. This money comes from the savings of workers aged 70 or older, which haven't been claimed. The goal is to guarantee that workers earning up to 17,000 pesos ($1,001.77) per month receive their full salary when they retire.
Several lawmakers in the opposition criticized the swift approval of the bill by the lower house, claiming that this is unconstitutional and politically motivated. Even Obrador acknowledged that the Supreme Court might declare this move unconstitutional.
Mexico's association of retirement fund entities last week said that individuals would still retain control over their accounts despite the new reform. As of the end of March, the private retirement system managed over 6.1 trillion pesos ($359.46 billion).
Aside from opposition going against Obrador's move, even two months back tens of thousands of demonstrators marched in cities across Mexico and abroad protesting against the ruling party and the Mexican President.
The protestors were demanding free and fair elections in Mexico, with the upcoming elections scheduled for June 2.
The president, on the other hand, said that people protesting against him don't care about democracy. Instead, they are organizing the march to ensure that the corrupt people are in power.
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