Voluntary savings for retirement Carlos Marmolejo, MEXICO. June 2014. Mexican Pensions System . Current situation. In 1997 the Mexican Pension System was reformed and replaced by an individual capitalization system managed by private pension fund managers (Afores).
Voluntary savings for retirementCarlos Marmolejo, MEXICO
In 1997theMexicanPensionSystemwasreformed and replacedbyan individual capitalizationsystemmanagedbyprivatepensionfund managers
50,878,419Individual Accounts in the System
16,143,422of those Accounts are active.1
1. With at leastonecontribution in a 12 monthperiod.
The resources in the system will not be enough for most of the current working force to receive adequate pension payments at retirement.
Average balance of an Individual Account: US$ 3,169
Replacement rate1 in Mexico: 32%
Itisnecessary to increaseVoluntarySavings
Percentageof theaverageperceivedwagein thelast 10 years of workthatan individual willreceive as pension.
59%of workers are under 40 yearsold, whichrepresents a widepotentialmarketforVoluntarySavings.
Consideringalltheaccountswith a positive balance in at leastone of theVoluntarySavingssubaccounts, withoutconsidering a minimum balance.
However, it depends on each AFORE’s business model and sometimes it requires additional procedures to make a deposit.
1. Government Benefit (savings matching program)
2. Mobile Airtime and other benefits, depending on the AFORE
Voluntary Savings Collection by Retailers
Carlos Marmolejo, MEXICO
I want to make a Voluntary Saving deposit, please
Please, give me your ID number or mobile number
My ID is …..
Howmuchwouldyouwish to depositin yourAccount?
$200 pesos, please
Sure, just a second
Youhavereceived a VoluntarySavingsDepositfor