The profits obtained by the Retirement Fund Administrators (Afore) in the first eight months of 2024 for taking care of the pension resources of millions of Mexicans increased 32 percent annually, with figures as of the end of last August, official data reveal.
According to the most recent information from the National Commission for the Retirement Savings System (Consar), between January and August of this year, the Afores reported a profit of 8,359 million pesos, higher than the 6,320 million of the same period in 2023.
The profits of the Afore are not the same as the capital gains they give to workers, since the latter are returns on the retirement savings they manage by investing in the markets.
Instead, profits refer to the margin that these companies obtain by managing workers’ resources. The funds managed by the Afores are made up of mandatory savings for retirement, which are paid directly by employers.
For the administration of the funds, the 10 companies operating in the market charge a commission, which after deducting operating expenses becomes their profit.
With more than 8.3 billion pesos obtained in the first eight months of the year, the Afores are beginning to reach their profit ceiling reported in 2021, the year prior to the entry into force of the SAR reform of 2020, promoted by the government of President Andrés Manuel López Obrador, which imposed a maximum cap on the commission percentage that these institutions can charge workers.
Between January and August 2021, the group of administrators had obtained an unprecedented figure for a similar period of 9,815 million pesos.
The limit on the commissions that the Afore can charge came into effect at the beginning of 2022, which caused the Afore to have a 62 percent drop that year, reaching 5.5 billion pesos from 14.52 billion in 2021, the second highest in their history, only below the 15.435 billion pesos they reported in 2020.
The federal government justified the measure by pointing out that these private financial institutions charged one of the highest percentages in the world, so it adjusted the cap to an average obtained from those charged in similar countries such as the United States, China and Colombia.
The Afores that operate in the Mexican market obtain their income from the 0.57 percent annual commission that they currently charge to the more than 75 million Mexicans for managing their more than 6.5 trillion pesos resulting from pension savings. Factors such as operating expenses, taxes, among others, are subtracted from said income, and the remainder is the net profit of these institutions.
According to Consar, between January and August 2024, the Afores charged Mexican workers 23,261 million pesos in commissions, an increase of 13 percent compared to the 20,663 million pesos in the same period in 2023. This year’s sum is still below the maximum of 26 billion pesos reported in the first eight months of 2021.
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– 2024-09-25 07:32:32
