Pennsylvania, United States.- In the Mexican pension system, it is necessary to promote a voluntary savings scheme that includes workers who have formal resources but do not contribute to social security, recommended Juan Hernández, head of Vanguard for Latam.
In an interview, the representative of the investment manager considered that one of the main challenges in Latin America and in particular countries like Mexico, is that within the universe of informality, savings and investment schemes are generated for independent workers with the capacity to save, especially in long-term instruments to generate returns.
“We are recommending voluntary savings to try to help people who are not covered by formal schemes, that will help them to have financial savings,” he said.
However, he commented that in order to address the challenge of providing pensions to all informal workers, structural public policy measures will be necessary.
“A pension reform, a financial reform, will not solve the problem of informality. This goes beyond the pension market. It is a problem for Latin American societies. It would be very unfair to ask a pension system to solve the problem of informality,” he warned.
The director considered that access to diversified investment schemes, whether through funds or ETFs (Exchange Traded Funds) are the main options, especially if they are low cost and accessible to investors.
“We believe in balanced portfolios, between stocks and bonds, local and international, well diversified,” he added.
He explained that diversifying investment portfolios, regardless of whether the funds are for formal workers or independent savers, is necessary in a scenario of volatility.
“The more companies or issuers (an instrument) has, that have liquidity and certain requirements, we feel that the risk of the portfolio is substantially reduced,” he said.
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