Mexico's social security institute IMSS, which provides coverage for private sector workers, and ISSSTE, the pension and health care provider for state employees, has signed an agreement so private sector workers can move to jobs in the public sector and vice-versa without the loss of rights and benefits.
The agreement is a fundamental step towards the creation of a national social security system, finance minister Agustín Carstens said in a press release.
The arrangement is part of the reform to ISSSTE law that included the creation of state-run pension fund provider Pensionissste, which manages contributions from federal workers, and the portability benefit that enables workers to migrate from the public to private sector and vice-versa and still keep their accrued pension benefits.
The ISSSTE-reform legislation was signed into law in March 2007.
In December 2008, Pensionissste, with 44.1bn pesos (US$3.2bn) in assets under management, joined the Afore pension fund system.
Under the agreement, IMSS and ISSSTE take into account an affiliate's years of service to the other institution. In this way, workers will keep their pension contributions, disability and life insurance benefits and rights to have access to healthcare services once retired, according to the press release.
The centerpiece of the agreement is social security rights are now associated with workers and not employers, IMSS head Juan Francisco Molinar said in the statement.
The agreement benefits a total of 21mn workers, equivalent to 85% of wage-earners, according to finance ministry SHCP.