Background on Julio César Cervantes and his Role
Julio César Cervantes, the president of the National Commission for the Savings System for Retirement (CONSAR), has paved the way for Mexican pension funds, known as Afores, to invest an additional 600 million pesos in infrastructure projects. This move aims to capitalize on the investments of Plan México, initiated by President Claudia Sheinbaum’s administration.
Regulatory Changes and Their Impact
Prior to the regulatory changes, Afores were limited to investing a maximum of 20% of their investment portfolio in infrastructure-related instruments. The recent modifications, published in the Diario Oficial de la Federación (DOF) in November 2024, have increased this limit to 30%.
Cervantes emphasized that these changes align with Article 43 of the SAR Law, which mandates Afores to not only seek returns for workers’ pensions but also promote national development and infrastructure.
Current Infrastructure Investments by Afores
As of August, Afores held 978.932 billion pesos in infrastructure, representing 12.6% of their total net assets. This includes 331.939 billion pesos in energy and 41.107 billion pesos in housing.
Cervantes acknowledged that while other pension funds globally have more infrastructure investments, Mexico is at a “good level” compared to Latin American counterparts like Chile and Colombia.
The regulatory space for Afores infrastructure investments currently stands at approximately 600 million pesos, with ongoing growth in assets.
Challenges Facing Afores and SAR
Cervantes highlighted several challenges facing Afores and the SAR, including the gender gap, informal sector workers excluded from the system, and “coyotes” – unofficial intermediaries who mislead workers and charge fees for free services like unemployment withdrawals.
“The ‘coyotes’ issue is indeed a significant problem,” Cervantes admitted. “Our goal is to raise awareness that workers can access their funds for free by directly handling their paperwork.”
He explained that these intermediaries exploit regulatory loopholes in unemployment withdrawals, leading workers to deplete their retirement savings accounts. Cervantes mentioned that coyotes charge around 10,000 pesos for a withdrawal equivalent to 35,000 pesos (approximately 25 UMAs).
Cervantes revealed that CONSAR has identified several companies engaging in such practices and shares a monthly list with the SAT, IMSS, and Infonavit for auditing.
Key Questions and Answers
- What are Afores and SAR? Afores are private pension funds in Mexico, while SAR refers to the Savings System for Retirement, overseen by CONSAR.
- What are the regulatory changes? The maximum investment in infrastructure-related instruments for Afores has increased from 20% to 30% of their investment portfolio.
- Why are these changes important? These modifications aim to encourage Afores investments in infrastructure projects, aligning with national development goals and Plan México.
- What challenges does CONSAR face? Key challenges include addressing the gender gap, integrating informal sector workers into the system, and combating unofficial intermediaries (coyotes) who mislead workers.
