Over the past six months, there has been renewed resistance against an old enemy in Latin America: pension privatisation.
Labor unions and social movements across Peru, Panama, Chile, Argentina and Mexico have taken to the streets, in mass combative struggle, against decades of neoliberal policies that seek to convert pension systems into a profit engine for private capital.
In Mexico, teachers organised under the National Coordinator of Education Workers (CNTE) have emerged as the vanguard, advancing the resistance to pension privatisation as a class and social struggle for sovereignty, dignity and the future of public goods.
The CNTE was established in 1979 as a democratic current within the National Educational Workers Union (SNTE). Their campaign against pension privatisation emerged in 2007, after Felipe Calderón passed a law privatising pensions for public workers under the Institute for Social Security and Services for State Workers (ISSSTE).
However, the fight gained new urgency in February last year when President Claudia Sheinbaum broke her campaign pledge to repeal the 2007 reform, proposing instead minor changes to the ISSSTE.
The February announcement sparked spontaneous protests across the country, initially organised independently by rank-and-file teachers, then led by the CNTE as the movement expanded.
Though Sheinbaum quickly withdrew her proposal, the protests intensified. As actions escalated from short-term strikes across the country to a 72-hour take-over of Mexico City’s Zócalo central plaza, the movement’s demands expanded from reversing Sheinbaum’s reform to fully restoring the pre-neoliberal pension model.
On May 15, Mexico’s Teacher’s Day, the CNTE launched an indefinite national strike.
The ensuing mobilisation drew about 22,000 teachers to a round-the-clock encampment at the Zócalo, transforming it into a living and sprawling tent city, that spilled into the surrounding downtown commercial area for 23 days.
Despite increasingly slanderous corporate media narratives that treat the teachers’ actions as chaotic and self-interested, the CNTE’s struggle against pension privatisation is about more than their own retirement conditions. In challenging the political and economic contradictions of the Morena government’s progressive policy platform, the movement also represents a broader class conflict in the region, tied to the deepening precarisation of socio-economic conditions over the last 40 years of capitalist globalisation.
The newly-surfacing tensions expose how Mexico’s dependent economy forces even left-leaning governments to accommodate capital’s demands and why sustained grassroots pressure is necessary to defend working-class interests.
Neoliberal reforms
The 2007 pension reform was only the latest chapter in a decades-long campaign of neoliberal structural adjustment across Latin America. Championed by international financial institutions, these reforms systematically dismantled labour rights, social protections and state institutions in the name of restoring profit rates.
The reforms were highly damaging to Mexico’s economy and working class. Economic liberalisation — culminating in the free-trade agreement known as NAFTA in 1992 — sparked massive capital flight, a crushing recession and a peso devaluation exceeding 100%.
At the same time, the country drained its public coffers repaying the high-interest loans issued by these global lending institutions, triggering a financing crisis. As employment and real wages plummeted, so did public pension contributions, pushing the system into crisis.
The very architects of the structural adjustment programs that had triggered the crisis, particularly the World Bank, then promoted pension privatisation across Latin America as a solution. Experts affiliated with Washington, or the international financial institutions they controlled, advised Mexican officials that privatising the administration of pensions would redirect worker funds into productive investments, spurring growth and jobs. They were also advised that relieving the pension burden would promote fiscal discipline, and encouraged to combat capital flight by lowering labour costs.
These reforms dealt a devastating blow to workers, increasing their time in the labour market by up to 10 years.
Mexico’s pension system was restructured by replacing its solidarity-based pay-as-you-go model — where active workers funded retirees’ pensions — with individual accounts managed by private financial institutions known as Afores (Administradoras de Fondos para el Retiro, or Retirement Fund Administrators).
The reform began with private sector workers under the Mexican Social Security Institute in 1997, and then was later expanded to public sector workers under ISSSTE in 2007. These reforms dealt a devastating blow to workers, increasing their time in the labour market by up to 10 years and making workers’ retirement dependent on their own savings, which, in an economy where almost half the population reported having little to no money left at the end of the month, does not guarantee sufficient income upon retirement.
Retirees’ income was further eroded in 2017 under President Peña Nieto, who decoupled pensions from the minimum wage, tying them instead to a government index (UMA), which is worth less than half as much and grows at a slower rate.
Morena
The May mobilisation marked one of the most defiant challenges to Morena’s progressive hegemony since the party assumed executive power in 2018 under President Andrés Manuel López Obrador (AMLO). Morena’s origins in grassroots struggle — and its opposition to the neoliberal policies that preceded it — make this confrontation particularly striking.
Morena built its popular appeal by promising a rupture from the neoliberal economic model that dominated Mexico for over four decades. Indeed, the 2007 ISSSTE reform, as well as the introduction of the UMA index under Peña Nieto, were implemented following AMLO’s contested 2006 presidential electoral defeat — widely seen as fraudulent.
The electoral loss, coupled with worsening conditions for Mexican workers and AMLO’s self-presentation as the champion of those dispossessed by neoliberalism, led workers — including teachers affiliated with the CNTE — to back his 2018 presidential campaign.
Despite campaigning to reverse the 2007 ISSSTE reform, AMLO and Sheinbaum opted for reforms that preserve its core neoliberal framework. At the end of his term, AMLO introduced the Pension Fund for Welfare (FPB) to supplement the UMA system’s drastic cuts to pensions.
Described by experts as a stopgap measure, the FPB redirects scarce public resources — projected to run out by 2038 — to compensate for cuts to pension income without requiring employer contributions, effectively functioning as a public subsidy to capital.
Though Sheinbaum also promised a repeal, she quickly reversed course. She argued that the FPB was superior to a full repeal and introduced a new ISSSTE reform bill in February targeting healthcare contributions. While Sheinbaum argued the move would leave pensions untouched and affect only the highest earning sector of public servants, teachers saw bigger implications.
Morena built its popular appeal by promising a rupture from the neoliberal economic model that dominated Mexico for over 40 years.
“It did affect a specific group of workers, and this started to raise concerns among educators. It felt like an attack,” explained Arturo Méndez, a CNTE-affiliated history teacher in Iztapalapa. The frustration was compounded by Morena’s multiple broken campaign promises to repeal the reform.
“People began to question why she would introduce a bill that didn’t touch a single comma of the old 2007 reform,” Mendez continued.
Although the struggle continues, the mobilisation won some important concessions. Not only did Sheinbaum withdraw her February ISSSTE reform, she also signed a presidential decree that freezes the retirement age for teachers, allowing men to retire at 58 with 30 years of service and women at 56 with 28 years. However, the concessions fall far short of restoring rights once guaranteed by the public pension system.
Privatisation reversal
The CNTE demands nothing less than the complete dismantling of Mexico’s privatised pension system, restoring collective pension solidarity through worker-controlled accounts and intergenerational support.
Morena has been resistant to the proposal, citing legal constraints and a lack of financial resources. This stand-off reveals the fundamental tension between political agency and structural constraints, raising the question of whether Morena’s adherence to neoliberal pension policy is a failure of will or an inevitable consequence of financialised capitalism.
The answer lies in part in the role of transnational financial capital, which tethers national policy like pension fund management to the demands of global capital. As Antonino Sánchez López of CNTE Section 22 in Oaxaca explained: “An economic elite, reinforced by mass media and international organizations, steers things from behind the scenes under the shadow of neoliberalism.”
This description captures the hidden architecture of pension funds like Afores, which are shaped by powerful corporate lobbies that promote fear-driven media narratives while pushing more privatisation. These same forces also limit Morena’s agency, as any abrupt move towards renationalisation risks economic retaliation in the form of capital flight or downgrading the country’s credit rating.
However, this tension is not static. Morena’s greatest leverage lies in how it defines and defends the state’s role in shaping the social agenda — a space where it has already exercised some agency through concessions to CNTE demands.
While Morena’s rollback of its proposed ISSSTE reform and wider bolstering of the social safety net have secured progressive gains for a substantial section of Mexico’s working class, its reforms are also limited, temporary and myopic; they prioritise short-term national stability over a direct confrontation with the macro-level dynamics driving the crisis.
Containing, if not reversing, the advance of capital’s assault on worker pensions means reclaiming public decision-making over our economic systems — transforming not just pension policy, but Mexico’s subordinate position in global capitalism.
Restoring the solidarity-based pension system would recover the $400 billion currently managed by Afores, plus another $28.8 billion charged to workers’ accounts via commission fees. It would also reduce the country’s debt dependency.
Today, 47% of Afores funds are lent to the government at interest, while the rest goes into foreign securities and private capital, including firms like BlackRock. State control of pension fund administration would eliminate the need for the government to borrow and pay interest on its own workers’ savings. These savings could then be directed towards social programs, while also curbing the bleeding of national wealth into tax havens.
Through disruptive mass mobilisations, the CNTE has forced a once unthinkable demand into the centre of public debate: returning public control over pension systems.
By refusing to subordinate their political actions to party loyalty and instead employing sustained mass action, the teacher’s movement has become a strategic choke point. It has expanded demands beyond state-managed reform to the disruption of the $56 trillion global pension machine that turns workers’ deferred savings into predatory financial capital that often fuels human rights abuses and environmental degradation.
CNTE’s strikes and blockades prefigure the only path forward — a class struggle that treats pension funds not as technical policy questions, but as a war against globalised financial capital. As Morena’s compromises show, it will not wage this war voluntarily. It falls to organised workers to impose it.
[Reprinted from NACLA. Isabel Villalón is an independent scholar, whose recent work focuses on the intersections of neoliberalism, labour and migration in Central America.]