Introduction to the Challenges Faced by Afores
Guillermo Zamarripa, President of the Mexican Association of Pension Fund Managers (Amafore), highlighted two primary structural challenges for the Sistema de Ahorro para el Retiro (SAR) and Administradoras (Afores): voluntary savings and improving client service.
Voluntary Savings: A Significant Challenge
Zamarripa emphasized that voluntary savings pose a substantial challenge for the SAR system. Although there has been growth in voluntary savings, it remains a small portion of the overall contributions. He stated, “The voluntary savings challenge is significant and requires thorough study to propose solutions.”
Gradual Increase in Mandatory Contributions: Another Challenge
The president also mentioned that the gradual increase in mandatory contributions to Afores, as a result of the 2020 reform to the Ley de los Sistemas de Ahorro para el Retiro, presents another challenge. The mandatory contribution rates are set to rise from 7.5% in 2023 to 15% by 2030.
Zamarripa explained, “As the mandatory contribution rate increases, more funds will flow into the system. This means more money to invest, which presents a significant challenge: ensuring these growing funds are invested wisely.”
Finding Suitable Investment Opportunities
The president of Amafore stressed that one of the long-term assets that could meet the desired characteristics is infrastructure. He added, “Maintaining diversified portfolios with a solid structure will be a major challenge for the SAR and Afores.”
Improving Client Service: An Ongoing Effort
Zamarripa acknowledged that enhancing client service is another challenge for Afores. He noted that the service process within administrators is “quite complex” due to numerous procedures requiring attention.
Consar’s Monitor Afore: Assessing Service Quality
Recently, the National Commission for the Retirement Savings System (Consar) launched the Monitor Afore, a tool that evaluates 31 indicators of administrators reflecting resolution times for key procedures and client satisfaction.
Key Questions and Answers
- What are the main challenges for Afores? The primary challenges are voluntary savings and improving client service.
- Why is voluntary savings a significant challenge? Despite growth, voluntary savings remain a small portion of overall contributions, requiring thorough study and proposed solutions.
- How do gradually increasing mandatory contributions impact Afores? As contribution rates rise, more funds flow into the system, presenting a challenge to invest these growing sums wisely.
- What types of investment opportunities are Afores seeking? Infrastructure is identified as a long-term asset that could meet desired characteristics for investment.
- Why is improving client service a challenge for Afores? The complex service process within administrators, involving numerous procedures, requires attention and enhancement.
- What is the Monitor Afore and how does it help? The Monitor Afore, launched by Consar, evaluates 31 indicators of administrators to assess resolution times for key procedures and client satisfaction.
