Background on Consar and its Role
The Comisión Nacional del Sistema de Ahorro para el Retiro (Consar) is a Mexican autonomous body responsible for overseeing and regulating the Sistema de Ahorro para el Retiro (SAR), which includes individual retirement accounts known as Afores. Established in 1997, Consar plays a crucial role in ensuring the stability and integrity of Mexico’s pension system.
Fraudulent Schemes and Consar’s Response
In recent years, Consar detected a fraudulent scheme inflating unemployment withdrawal values. This scheme involved private offices simulating high-salary employment for a single day to obtain larger unemployment withdrawals. These offices charged hefty commissions, ranging from 8,000 to 10,000 pesos per worker, for facilitating these withdrawals.
To combat this issue, Consar introduced a validation mechanism for unemployment withdrawals in late July 2024. This mechanism aimed to review and confirm the worker’s most recent registered salary before leaving employment, ensuring more accurate withdrawal amounts.
Impact of the Approved Reform
Despite the validation mechanism, unemployment withdrawals continued to rise. From January to May of the current year, workers withdrew 14,465 million pesos through partial unemployment withdrawals, marking a historical high and a 12% real increase compared to the same period in 2024.
The reform approved by the Chamber of Deputies now calculates unemployment withdrawal amounts based on the “average base salary of the last fifty-two weeks” (one year) of contributions. Previously, the law used the “most recent base salary of contributions,” allowing private offices to register workers with high salaries for brief periods to inflate withdrawal amounts.
Furthermore, the reform adjusts unemployment withdrawals for those with at least three years in their Afore, according to their cotization history. This change enables higher withdrawals above the current 10 UMA limit (34,395 pesos) when account balances are substantial.
Key Questions and Answers
- What is the main focus of the approved reform? The reform adjusts unemployment withdrawal calculations based on average base salaries over the past year, rather than the most recent salary, to prevent fraudulent schemes.
- How does this reform impact workers? Workers can now withdraw larger sums from their Afores when their account balances are high, provided they have maintained their accounts for at least three years.
- What were the previous issues with unemployment withdrawals? Private offices exploited loopholes in the law by registering workers with high salaries for short periods, leading to inflated unemployment withdrawal amounts.
- How does Consar ensure the integrity of the pension system? Consar monitors and regulates the SAR, implementing measures like validation mechanisms to combat fraudulent activities.
“With this modification, we respect the worker’s right to use their individual account resources during unemployment periods, ensuring withdrawals align with their salary history,” stated Consar.
The approved reform has been sent to the Senate of the Republic for further analysis and voting.
