Introduction to Afores and Their Fees
Afore SURA has emphasized that the reduction in fees charged by Afores (Occupational Retirement Savings Accounts) has resulted in substantial savings for workers, amounting to billions of pesos. This development is expected to contribute to better retirement provisions for employees.
SURA’s Perspective on Improved Retirements
Emilio Bertrán, the General Director of SURA, highlighted that when these savings are combined with the consistency of returns achieved through Afore investments, it leads to enhanced retirement benefits for workers.
Consar’s Projections on Fee Reduction
The National Commission for the System of Retirement Savings (Consar) has forecasted that between 2020 and 2031, the reduction in fees will accumulate to a total savings of 214,000 million pesos for workers.
For the year 2026, Consar estimates that the decrease in fees to 0.54% will result in savings of 6,900 million pesos for workers.
Understanding Afore Fees
Afore SURA clarified that fees encompass charges for safeguarding, administering, and investing workers’ resources, along with additional services such as managing the balance for housing savings, sending Statements of Account to email addresses, processing individual account transactions, correcting data, and facilitating resource withdrawals.
These fees are annualized and calculated based on a percentage applied to the accumulated balance in each worker’s Individual Account. This includes mandatory contributions, voluntary contributions, and investment returns generated by the savings.
The reported fees are in pesos and centavos, appearing on the quarterly Statements of Account that workers receive by law.
Reform Aimed at Lowering Fees
By 2026, nine out of ten Afores will charge workers a fee of 0.54% on the administered balances in their retirement savings account, while PensionISSSTE will charge 0.52%. This adjustment will lower the average Afore fee from 0.547% in 2025 to 0.538% in 2026.
According to Consar, this translates to an average gain of 50.2 pesos per 1,000 invested pesos, with a minimal administrative cost of just 5.4 pesos.
Impact on Workers’ Savings
The savings have amounted to billions of pesos for workers, complemented by the higher returns generated from these resources.
Key Questions and Answers
- What are Afores? Afore is an acronym for “Ahorro para el Retiro,” which are Occupational Retirement Savings Accounts in Mexico. These accounts allow workers to save for their retirement while benefiting from tax advantages.
- Who is Afore SURA? Afore SURA is one of the largest private pension fund administrators in Mexico, offering retirement, housing, and other savings plans to individuals and businesses.
- What are the Afore fees? Afore fees are annual charges levied on workers’ accumulated balances in their retirement savings accounts. These fees cover safeguarding, administering, and investing workers’ resources along with additional services.
- Why are Afore fees being reduced? The Mexican regulatory body, Consar, has implemented a reform to lower Afore fees, aiming to provide better retirement provisions for workers by maximizing their savings.
- How will lower fees impact workers? The reduction in Afore fees will result in significant savings for workers, estimated to be billions of pesos between 2020 and 2031. This, combined with higher returns on investments, will contribute to improved retirement benefits for employees.
