Background on Afores and Their Recent Success
The Administrators of Funds for Retirement (Afores) have seen a 27% increase in profits for the year 2025 compared to the previous year. This growth is attributed to factors such as historical gains in workers’ savings and the increase in managed resources due to mandatory contributions.
Mandatory Contributions and Commission Caps
In 2026, Afores will charge each worker a commission of 0.54% on the administered balance in their retirement account. Prior to the 2020 reform, the average commission was 0.90%. The reform capped Afores’ commissions to prevent them from exceeding the average charged in Chile, Colombia, and the United States’ pension systems.
The reform also gradually increased mandatory employer contributions to workers’ retirement accounts. Before the reform, employers contributed 6.5% of an employee’s salary; by 2025, this increased to 9.5%, with a target of 15% by 2030.
Plusvalías and Historical Gains
According to the National Commission for the Retirement Savings System (Consar), the growth in Afores’ profits is partly due to statistical distortion caused by high gains from investments in 2025. Between January and November, the gains from administered savings reached a record 1.12 trillion pesos.
There are ten Afores in the Retirement Savings System, nine of which are private and affiliated with financial groups (e.g., Banorte, Banamex, or Inbursa) or conglomerates (e.g., Profuturo, part of Grupo BAL). The profits of these private Afores accrue to the corporations they belong to.
Only one Afores, PensionISSSTE, is public and distributes its profits among its account holders.
Impact on Afores’ Accounts
Moisés Pérez Peñaloza, a pension specialist and founder of consultancy Yo Jubilado, explains that the growth in Afores contributions has led to more resources entering retirement savings accounts. Consequently, the balances subject to commissions have increased, offsetting the lower commission percentage.
Key Questions and Answers
- What are Afores? Administrators of Funds for Retirement (Afores) are private companies responsible for managing individual retirement accounts in Mexico.
- Why did Afores’ profits increase in 2025? The growth is due to historical gains from workers’ savings, increased managed resources from mandatory contributions, and statistical distortion caused by high investment gains in 2025.
- What changes were made to Afores in 2020? The 2020 reform capped Afores’ commissions and gradually increased mandatory employer contributions to workers’ retirement accounts.
- How do these changes affect workers? Employer contributions increased from 6.5% to 9.5% of an employee’s salary by 2025, with a target of 15% by 2030. This has led to more resources entering retirement savings accounts, offsetting lower commission percentages.
