Mexico sees double-digit growth in voluntary pension savings

Voluntary contributions in Mexico's pension system totaled 68.8bn pesos (US$3.35bn) at the end of September, up 14.1% from the end of 2017, according to pension fund regulator Consar.

Contributions made voluntarily by workers to their retirement savings represent only around 2% of the total savings that are managed by the system's pension fund managers (Afores).

The Afores' assets under management amounted to 3.28tn pesos at the end of September.

In its final report on voluntary savings under the administration of former president Enrique Peña Nieto, Consar hailed the strong expansion of its voluntary contribution channels, aided by a steady expansion of digital tools and private sector partnerships to facilitate deposits.

Outgoing Consar chief Carlos Ramírez stressed that retirement system savings made through voluntary contributions have increased from 15bn pesos in December 2012 - at the start of the Peña Nieto administration - to an estimated 72bn pesos at the end of November.

"[Voluntary] savings practically quintupled, and it's a significant [amount of] savings, even if it still represents only a very small part of the system," local daily El Economista reported Ramírez as saying.

"If it keeps going this way and on the path that we laid out we could still see very important growth in the coming years," Ramírez added.

The comments come at the start of the administration of Andrés Manuel López Obrador, who took office December 1. With his leftist Morena party holding a majority in congress, expectations are high that a major pension reform package is soon to follow.

The number of establishments that receive voluntary contributions had reached 12,000 in September, as part of a process to make such deposits more accessible to Mexican workers.

Digital advance

The report also detailed advances made with Consar's mobile phone app Afore Móvil since its launch in August 2017.

The app processed 210,000 voluntary savings deposits since going online, amounting to 75mn pesos. Consar noted that in the most recent months up to September, the app was receiving an average of 30,000 contributions per month.

The app offers an ever-growing gamut of tools for retirement planning, transparency requests and even a capability for migrants to save from abroad. Consar said the app had processed 6mn such services since the launch.