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Weekly Roundups

MORENA Proposes Emergency Withdrawal From Afores to Bear Crisis

By MBN Staff | Thu, 06/04/2020 - 14:17

In the midst of a pandemic that sparked not only a health crisis in the country but also an economic one, job losses have become part of the daily news. This week, Coordinator of the MORENA party in the Chamber of Deputies Mario Delgado, presented an initiative that establishes that those people who lost their jobs can automatically access an amount of MX$13,308 (US$607.4) from their Afore or retirement savings that can be issued in a single payment or in four monthly payments of MX$3,327 (US$151.9).

Mario Delgado's initiative has yet to be approved by the Chamber of Deputies and will later go to the Senate and then sent to President Andrés Manuel López Obrador to promulgate it. However, the Inter-American Development Bank (IDB) warned that access to pension funds should be a last resort tool and suggested seeking solutions that do not involve Afore withdrawals. Last week, Mexico’s central bank (Banxico) said it estimates that at least 800,000 jobs will be lost in 2020 although the number could rise to 1.4 million. 

“Allowing withdrawals from retirement savings in times of crisis? In normal situations, allowing a degree of liquidity is debatable. In the current situation, access to pension funds should be a tool of last resort,” wrote Senior Specialist in Labor Markets and Social Security at the IDB David Kaplan on his Twitter account.

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