Mexico's Telmex offers better pension plan for new hires, union says

© Reuters. FILE PHOTO: A view shows the Telmex headquarters, as the company's union went on strike after failing to come to an agreement with the company over a new collective labour agreement, in Mexico City, Mexico, July 21, 2022. REUTERS/Edgard Garrido

By Cassandra Garrison

MEXICO CITY (Reuters) -Union workers for Telmex, the Mexican telecommunications firm controlled by the family of tycoon Carlos Slim, on Wednesday said they were weighing a new offer from employers that included improvements to retirement benefits for new staff.

In a company document shared with union workers and seen by Reuters, new hires would upon retirement get a pension worth 100% of their final net pay, determined by their job category, becoming eligible after 35 years of work and once they turn 65.

That sum would be made up of the pension paid out by the Telmex contract plus worker entitlements with the state-run Mexican Social Security Institute (IMSS), it said.

The Mexican Telephone Workers Union, known as STRM for its Spanish acronym, was discussing the proposal in a general assembly and is expected to vote on it in due course.

The union, which represents 60,000 active and retired workers, began a two-day strike on July 21, the first in four decades, after talks with Telmex broke down over issues including salary raises, unfilled job openings and benefits for new hires.

The strike ended the next day following government mediation when Telmex, a unit of Slim's America Movil (NYSE:AMX), and the union agreed to participate in a committee that had 20 days to present solutions to the dispute.

Telmex's proposal aims to sweeten benefits, including via support for new hires acquiring houses through Infonavit, the largest state body that finances housing.

The company's offer did not appear to address other sticking points, including nearly 2,000 unfilled job openings.

Telmex said it wanted to boost its funds over the next 10 years and invest them in technology and creating new business.

"We must optimize our resources or reduce our expenses in order to make this possible," it said in its proposal. "We must give the company some air."