Background on Afores and Their Importance
Administradoras de Fondos para el Retiro (Afores) are Mexican pension funds that manage workers’ retirement savings. These Afores are crucial for ensuring a stable and secure future for millions of Mexican workers. The Comisión Nacional del Sistema de Ahorro para el Retiro (Consar) oversees and regulates these funds.
Profit Growth in 2025
According to the Consar, Afores’ net profits grew by 49% in the first five months of 2025 compared to the same period in 2024. By the end of May, Afores had accumulated a net profit of 6,302 million pesos.
This represents the highest net profit for Afores in May since 2013, as per Consar’s records.
Understanding the Profit Surge
Mari Nieves Lanzagorta, vicepresident of the Mexican Afores Association (Amafore), explained that the surge in Afores’ net profits is due to a statistical distortion caused by high capital gains in May.
In May 2025, Afores achieved capital gains of 175,474 million pesos, the best returns since August 2024, as reported by Consar.
Lanzagorta clarified that, by law, Afores must maintain a financial reserve to cover any potential losses from violations of investment regulations, ensuring workers’ savings remain secure.
This financial reserve fluctuates based on the Afores’ capital gains or losses, as it is invested similarly to the rest of the managed resources.
“Since the reserve is invested the same way as Afores’ resources and there was a significant capital gain in May, this is considered ‘pure profit.’ However, it’s merely a repositioning of the reserve held by Afores,” Lanzagorta stated.
She emphasized that a better indicator of profits is the income from commissions and gross profit.
Income from Commissions
Consar reported that Afores’ commission income in the first five months of 2025 totaled 16,094 million pesos, a 13% increase compared to the previous year and the highest figure in Consar’s records.
César Islas, general coordinator of Economic Studies, Estadística y Proyectos Especiales at Consar, noted that Afores’ commission income has dropped by 17% in real terms since 2021, before the commission reduction reform.
This decline followed a 2020 reform to the Retirement Savings System that capped Afores’ commissions, preventing them from exceeding the average charged by pension systems in the United States, Chile, and Colombia.
Impact of the 2020 Reform
Following the 2020 reform, which took effect in December 2021, Afores’ commissions fell from over 0.80% of administered balances in 2021 to 0.57% starting in 2022.
By 2025, regulators approved a commission of 0.55% on administered balances – the lowest in the SAR’s 28-year history.
Alongside the commission reduction, there was a progressive increase in mandatory employer contributions to workers’ retirement accounts.
Prior to the reform, employer contributions were 5.15% of a worker’s salary.
Starting in 2022, these contributions gradually rose to reach 9.51% of a worker’s salary in 2025.
The goal is to have employer contributions reach 15% of a worker’s salary by 2030, ensuring a more generous pension upon retirement.
Moisés Pérez Peñaloza, founder of the consultancy Yo Jubilado, stated, “Before the 2020 reforms, Afores received less in contributions. Now there is more money to manage.”
Pérez explained that the contribution increases have significantly boosted the resources entering Afores, leading to growth in their investment portfolios and capital gains. Consequently, administered balances have expanded over recent years, resulting in higher commissions – though reduced – being charged on a larger base.
Key Questions and Answers
- What are Afores? Administradoras de Fondos para el Retiro (Afores) are Mexican pension funds that manage workers’ retirement savings, overseen by the Comisión Nacional del Sistema de Ahorro para el Retiro (Consar).
- Why did Afores’ profits surge in 2025? The profit growth is due to statistical distortion caused by high capital gains in May 2025, as explained by Mari Nieves Lanzagorta from Amafore.
- How have commissions changed since the 2020 reform? Following the 2020 reform, Afores’ commissions dropped from over 0.80% in 2021 to 0.55% in 2025, the lowest rate in the SAR’s history.
- What is the goal of increasing mandatory employer contributions? The aim is to reach 15% of a worker’s salary by 2030, ensuring a more substantial pension upon retirement.
- How have these changes impacted Afores’ performance? With increased contributions, Afores’ investment portfolios and capital gains have grown, leading to larger administered balances and higher (though reduced) commissions.
