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).
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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