The Mexican government has announced the creation of the Pension Fund for Welfare. President Andrés Manuel López Obrador had initially planned to unveil the new initiative on May 1st, Labor Day, but decided to announce it earlier on April 30th. This new fund is designed to supplement pensions for Mexican workers, particularly those who rely solely on their Afore retirement savings to retire with 100 percent of their last income.

The decision to create this fund has been controversial, with opposition parties including the PRI, PAN, PRD, and Movimiento Ciudadano, labeling it a 'robbery' of the savings of those over 70. Despite the opposition, the fund was approved by the Chamber of Deputies and the Senate, largely due to the majority held by Morena and its allies.

The fund will be financed by inactive savings accounts of adults over 70, a measure that is expected to impact around 5.5 percent of savers' accounts. This move has been endorsed by the Ministry of Finance and Public Credit (SHCP) and the Mexican Association of Afores. Additional funding will come from the profits of the Felipe Ángeles International Airport (AIFA) and the Tren Maya.

The Pension Fund for Welfare is designed to ensure that workers receive a pension that is as close as possible to their last income. For example, if a worker's retirement savings currently provide around 40 percent of their salary, this new fund will supplement that amount to reach 100 percent.

This initiative is part of the government's effort to improve the poor retirement conditions for workers under the 1997 IMSS scheme, which does not guarantee a pension close to a worker's income. Despite its official announcement, opposition officials have stated they will challenge the creation of the Pension Fund for Welfare through legal means.