MEXICO - The Mexican Congress has approved controversial changes to the health and pension system for 2.8m government workers.
The reforms have been perceived as an attempt to save the system from insolvency and to increase retirement-fund options for government employees.
But critics questioned whether the government had abandoned its social responsibilities by delivering the changes.
At the core of the new law is the creation of individual, private accounts unlike the current communal pool system.
Under the plan, the government will transfer US$ 4.51bn of worker pensions currently managed by banks to a new agency, which will manage the assets from the old and new system for three years.
Without the reforms, supporters said Mexico’s government could run a budget deficit equivalent to 3% of the gross domestic product by 2012.
In the broader context, some commentators said the law had privatized the risk for government workers because their retirement funds were invested in firms that traded on the Mexican Stock Exchange.
Carlos Navarrete from the opposition Democratic Revolutionary Party (PRD) said: “The idea is that everybody will be left to scrape by on their own.”
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