07 Oct Estimation of retirement pensions by Minimun Wage.
On September 20th, 2019, the Eighteenth Collegiate Court for Administrative Matters of the First Circuit issued a reiterative case law in labor and employment matters, which considers that the Unit of Measurement and Update (UMA, for its acronym in Spanish) can’t be applied as a factor for the estimation of retirement pensions, which must always respond to the Minimum Wage.
The aforementioned precedent is located in the Decree of the Constitutional Reform, published in the Official Journal of the Federation on January 27th, 2016, in which article 123, section A, subset VI of the Mexican Constitution, was amended in order to separate the purposes and functions of the Minimum Wage and the Unit of Measurement and Update, establishing the UMA as the basis for calculation of various amounts of diverse obligations so that the minimum wage could be increased without the financial repercussions of increasing the cost of the obligations which depended from it.
However, the employees’ retirement pension is a social security benefit derived from the individual employment relationship and is naturally supported by the salary itself, which is clearly a labor and employment benefit.
Consequently, setting the amount, updating, payment or establishing a limit must be calculated using the salary as a factor, rather than the UMA, which responds to economic factors other than the social security benefits. Therefore, said application is legally contradictory and inadmissible.
For any questions or additional information regarding the estimation of retirement pensions, please contact us.
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Gerardo Valencia
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Karla Jiménez
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Sandra Chávez
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