Modality 40: IMSS implements temporary restrictions while assessing its financial viability

The Mexican Social Security Institute (IMSS), through Agreement ACDO.AS2.HCT.101026/302.P.DG, published in the Official Gazette of the Federation (DOF), approved the performance of an analysis of the financial effects of the Voluntary Continuation in the Mandatory Regime, commonly known as Modality 40, and implemented temporary measures that mainly affect new enrolments in this scheme.

Background

Modality 40 has been used by workers who wish to preserve their pension rights and, in certain cases, increase their contribution base salary in order to improve the amount of their future pension.

However, the IMSS Technical Council determined that an evaluation should be carried out regarding the financial impact this scheme represents for the Institute, with the aim of analysing its sustainability in the medium and long term and, where appropriate, proposing regulatory adjustments.

Main provisions of the agreement

1. A financial analysis of Modality 40 has been instructed

The IMSS Finance Directorate must conduct a study on the impact of Voluntary Continuation on the Institute’s financial position.

The analysis must be completed within a maximum period of six months from the issuance of the Agreement.

2. Potential regulatory amendments

Based on the results of the financial analysis, the IMSS Legal Directorate must coordinate the preparation of proposals to amend the applicable provisions, with the objective of strengthening the financial viability of this scheme in the medium and long term.

Temporary measures for new enrolments

While the aforementioned analysis is being conducted, IMSS will implement temporary restrictions for individuals applying to join Modality 40.

Limitation of the contribution base salary

Individuals applying to join the Voluntary Continuation scheme may only do so based on:

The last contribution base salary registered with IMSS at the time they left the mandatory regime; or

Up to that salary increased by one UMA (Unit of Measurement and Updating).

Likewise, the salary selected may not be lower than the applicable current general minimum wage.

Treatment of individuals already enrolled

The Agreement establishes that individuals who, as of the effective date of these measures, are already enrolled in Modality 40:

Will retain the conditions currently contracted.

May complete the previously contracted insurance period.

Will be credited with the contribution weeks and salaries effectively paid.

Therefore, the measure does not imply an automatic cancellation nor does it affect the rights of individuals who already participate in this scheme.

Other relevant clarifications

Effective date of new enrolments

New insurance coverage will take effect exclusively from the date on which the corresponding application is submitted.

Digital procedures

IMSS anticipates that procedures related to these enrolments will be carried out through digital mechanisms.

Incompatibility with other schemes

The restriction on simultaneously enrolling in Modality 40 and the voluntary incorporation scheme for independent workers provided for in Article 13, Section I, of the Social Security Law remains in force.

Impact on workers and prospective pensioners

The announced measures mainly affect:

Individuals who have not yet enrolled in Modality 40 and had planned to do so using salaries significantly higher than those last registered with IMSS.

Former employees who are currently considering a pension enhancement strategy and have not yet formalised their enrolment.

Advisors and firms specialising in pension planning that will need to reassess previously designed strategies.

Conversely, individuals who are currently enrolled will retain the conditions under which they contracted their coverage.

Implications and recommendations

The publication of this Agreement confirms that IMSS is not eliminating Modality 40; however, it is establishing temporary restrictions for new enrolments while it evaluates the scheme’s financial impact.

Furthermore, the announcement of an actuarial and financial study could lead to future reforms modifying the requirements, conditions or calculation mechanisms applicable to the Voluntary Continuation scheme. For this reason, it is advisable for workers, prospective pensioners and specialised advisors to closely monitor the results of the analysis and any regulatory amendments that may be issued during 2027.