Mexican Afore commissions to fall across board in 2018

Mexico's retirement system authority (Consar) published next year's commission rates for the nation's 11 managers of individual retirement fund accounts (Afores), announcing that all commission rates will be falling in 2018.

Consar also said the average commission rate taken by the Afore managers will have fallen 21% in 2018 to 1.021% from 1.288% in 2013, and has dropped 40% from 2009. The lower average rate represents greater savings for individual workers. The government entity noted that rate reductions have generated an additional 8.896bn pesos (US$447mn) in savings for workers.

However, some experts see the lower rates as a deceptive sign of improvement in what is widely considered a very flawed system.

Recent comments from Fitch Ratings recognized the 40% drop in commissions in the last decade, but noted that Chilean AFP commissions had fallen 60% in the same period, and raised concerns regarding Mexico's collection model and how commissions erode the total contribution rate publicized by the nation's retirement authorities.

The following table details the new commission rates going into effect at the start of 2018 for the various Afore managers, as well as offering comparisons to the rates in 2013 and 2017.

Pictured: Consar president Carlos Ramírez.