Condusef: Voluntary savings from the Afores 'no longer enough'

According to a statement from the National Commission for the Protection and Defense of Users of Financial Services (Condusef), it indicated that, within this current financial panorama, the model of the Retirement Fund Administrators (Afores) are located at an inflection point, according to the statements by Oscar Rosado Jiménezpresident of the Commission.

In the recent award ceremony, Rosado Jiménez highlighted that it is imperative to rethink a strategy that governs the Aforeswhich especially consider the reform proposals for the pension system that seek to ensure a guaranteed maximum rate for employees at the time of their retirement.

According to Rosado Jiménez, the review of the Afore business model will have to focus on offering a rate of return that adjusts to the expectations and aspirations of Mexicans, which they will be able to take as reference in average salary to perform Mexican Social Security Institutewho currently earns around 16 thousand pesos per month.

This need for adaptation goes beyond the traditional AFORES offeraiming towards a diversification of the product portfolio that includes, but does not limit on voluntary savingswhich, in the opinion of Rosado Jiménez, is no longer sufficient to meet the retirement needs of the population.

Challenge to encourage retirement savings for new generations

Rosado Jiménez, faces deep behavioral barriers, as well as the economic perceptionwhich makes it essential to rephrase the following way in which savings are promoted.

The proposed solution involves integrating the Afores into a broader financial scheme, in which these retirement accounts become the core of the financial activity of individualsespecially young people.

With the objective of achieving integration, Rosado Jiménez suggests that the Afores expand the offer to products complementary financialsuch as insurance and investment funds, which are mainly aimed at attracting millennials, as well as the young population between 18 and 30 years old.

This strategy not only seeks to increase the attractiveness of Afores among a segment of the population historically difficult to capture, but also change the perception of savings, from being seen as a sacrifice to becoming a common and beneficial practice.

For the call of the Condusef action highlights the urgency of reimagining the retirement savings system in Mexico.

Through adaptation and innovation, Afores have the opportunity to become a fundamental pillar for the financial future of Mexican workersensuring that retirement savings become an integral part of your long-term financial planning.