Background on Mexican Pension Fund Managers (Afores)
The Administrators of Pension Funds for Retirement (Afores) in Mexico have seen a 25% increase in their net utilities, reaching the highest levels since before the 2020 reform that capped the commissions they charge workers. This growth is attributed to historical gains from the first eight months of 2025 and increased managed resources due to mandatory contributions.
Relevant Reforms and Their Impact
In 2020, reforms were implemented to limit Afores’ commissions, preventing them from exceeding the average charged in pension systems of the United States, Chile, and Colombia. The commission rates dropped from over 0.80% in 2021 to 0.57% in 2022, and further decreased to 0.55% in 2025 – the lowest rate in the SAR’s 28-year history.
Alongside these commission changes, mandatory employer contributions to workers’ retirement accounts were progressively increased. Before the reform, these contributions were 6.5% of an employee’s salary. The target is to reach 15% by 2030, aiming for better retirement pensions.
Expert Analysis and Afores’ Performance
Moisés Pérez Peñaloza, founder of consultancy Yo Jubilado, explains that the growth in Afores contributions and increased resources have led to higher balances subject to commissions, preventing significant income reduction from commissions compared to pre-2020 levels.
“Before the 2020 reforms, Afores received fewer contributions. Now, there’s more money to manage,” Pérez Peñaloza stated.
Amafore and Consar Explanation
The Mexican Association of Pension Fund Managers (Amafore) and the National Commission for Retirement Savings (Consar) attribute the Afores’ net utility surge in 2025 to statistical distortion caused by high gains achieved by Afores this year.
- In January-August 2025, Afores recorded profits of 752,072 million pesos, surpassing the 2024 total (556,800 million pesos) by 35%.
Key Questions and Answers
- What are Afores and their significance in Mexico?
Afores are private, autonomous entities that manage individual retirement accounts for workers in Mexico. They play a crucial role in the country’s pension system, investing contributions and providing retirement benefits.
- What were the 2020 reforms aimed at?
The reforms capped Afores’ commissions to prevent them from exceeding average rates in other countries’ pension systems, aiming for fairer charges to workers.
- How have mandatory contributions changed since the reform?
Mandatory employer contributions to workers’ retirement accounts have progressively increased, targeting 15% of an employee’s salary by 2030 to enhance retirement pensions.
- Why are Afores’ net utilities at their highest since 2020?
The growth is due to historical gains from investments and increased managed resources resulting from higher mandatory contributions.
