In March 2008 a system of individual accounts for Mexico’s public-sector employees began operations. As a result, all new hires beginning April 1, 2007 must join the individual accounts system.
Other public employees under age 46 had until the end of July 2008 to join or remain in the existing pay-as-you-go (PAYG) program for public employees. Those employees who switched received an inflation-indexed bond representing the value of their accrued rights under the PAYG system.
In Mexico, public employees represent about 5% of the labor force. The public employees’ individual accounts are managed by Pensionissste. After the first three years, public employees may switch to any of the pension fund management companies (AFOREs) that handle the private-sector individual accounts. Pensionissste will continue to manage the individual accounts for public-sector employees who have not chosen an AFORE.
Sources:"Mexico," International Update, U.S. Social Security Administration, May 2007; "Instalan Comisión de Pensionissste," Radiotrece.com.mx, el 11 de marzo de 2008; "Mexico's Pensionissste to Invest $9.3 Billion by 2012," bloomberg.com, March 24, 2008.