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In 2022, the administrators of retirement funds (Afores) had a baja in its commissions of 24 basis points compared to 2021; the average commission went from 0.81 to 0.57%, but how will it benefit the saver?

According to the National Retirement Savings System Commission (Consar), this reduction in the collection of commissions will generate savings of 11,800 million pesos and an approximate 6% increase in the Replacement Rate, which will benefit 70 million people.

The Replacement Rate is the percentage of the last salary that a worker can receive when he decides to retire. Currently, in Mexico the rate hovers around 26%, according to data from the Organization for Economic Cooperation and Development (OECD).

It should be remembered that the Consar and the Retirement Savings System (SAR) They have entered a transition period since the reform of the pension law, carried out in December 2020. Where, the replacement rate could reach 62%, on average, according to the Bank of Mexico.

Likewise, with the modifications to the law, the aim is for the worker to be at the center of the decisions made by the outskirts and, given this, choose the best options when investing.

In parallel, the Mexican Association of Afores (Amafore) has stated that this reduction in commissions would lower the income of the Afores by 40 percent.

However, its owner Bernardo González Rosas, president of the Amafore, has commented that the priority is that the service to the workers is not affected and less “the extraordinary results” that are obtained in terms of investments.

“There will be no affectations in the service, nor in the good work of obtaining returns for the workers,” González Rosas commented.

At the end of 2021, the Afores had a historical return of 5.35% in real terms. “This is as a result of the investments to which workers have access through the Siefore regardless of their income level or age.”

What is an Afore?

The Afore is a private financial institution that is in charge of managing the funds for the retirement of workers affiliated with the Mexican Institute of Social Security (IMSS) and the Institute of Security and Social Services for State Workers (ISSSTE).

However, the Afore Pensionissste is the only public Afore with a corporate purpose that distributes its Operating Remainder among its account holders.

In the 10 Afores in the market, they receive the resources of the savers, through the contributions made by the employer and by the saver throughout their working lives.

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