Introduction to Afores and Their Recent Growth
In 2025, the retirement savings of Mexican workers managed by Afores have surpassed 7 trillion pesos for the first time in history. This significant growth of over a trillion pesos in just one year is largely attributed to the impressive gains, or plusvalías, achieved by these funds.
Current State of Afores
As of March, Afores administer 68.682 million retirement accounts with a total of 7,194 billion pesos. This represents a 17% or 1.05 billion peso growth compared to the previous year, according to the National Commission of the Retirement Savings System (Consar).
Factors Driving Afores Growth
Moisés Pérez Peñaloza, a retirement and Afores specialist and founder of the consultancy Yo Jubilado, identified two primary factors contributing to this growth:
- Record-breaking gains (plusvalías): Afores have reported substantial gains in the past year, accumulating 770.631 billion pesos in plusvalías over the last twelve months.
- Increased mandatory contributions: Following a reform in 2020, employers’ mandatory contributions to Afores have been progressively increasing and are expected to reach 13.88% of the worker’s salary by 2030.
Understanding Plusvalías
Afores are tasked with investing workers’ retirement savings in financial instruments such as stocks or bonds to generate the highest possible returns. When these financial instruments yield gains, Afores report plusvalías, which in turn increases the managed resources.
The recent surge in plusvalías can be attributed to the interest rate cuts implemented by Mexico’s Bank of Mexico.
Mandatory Contributions Increase
Prior to the 2020 reform, employers’ mandatory contributions stood at 5.15% of the worker’s salary. Since 2022, these contributions have been gradually increasing and reached 8.42% by the end of that year. In 2025, they rose to 9.51% of the base salary.
The ultimate goal is to have employers’ mandatory contributions amount to 13.88% of the worker’s salary by 2030, raising total contributions from the previous 6.5% pre-reform level to 15%.
Key Questions and Answers
- What are Afores? Afores (Afore) stands for “Ahorros para el Retiro,” which are privately managed individual retirement accounts in Mexico. They invest workers’ savings in various financial instruments to generate returns for their future retirement.
- Why are Afores growing? The growth in Afores is primarily due to record-breaking gains (plusvalías) and increased mandatory contributions from employers, as outlined in the 2020 reform.
- What are plusvalías? Plusvalías refers to the gains or profits generated by Afores’ investments in financial instruments like stocks and bonds. These gains are reported by Afores, which then use them to increase the managed resources.
- How do mandatory contributions impact Afores? The progressive increase in mandatory employer contributions, as per the 2020 reform, directly contributes to the growth of Afores by injecting more funds into these retirement accounts.
