Email: elizabeth.albarran@elsoldemexico.com.mx
X: @ElizaAlbarran
Do you know how much your Afore charges you to manage the money you will receive as a pension? I tell you that of the 10 Afores on the market, eight charge 0.57% on the balance (the total savings you accumulate), another administrator charges 0.56% and PensionISSSTE is the cheapest with 0.53%.
Do you think there is competition? Not for me, firstly because the collection of the commission is not really related to the returns they give me, that is, I may be in one of the Afores that charge the highest commission such as Afore Azteca or XXI Banorte, but that does not mean that I will have the best returns or that my pension will be higher than the minimum wage.
Since their existence, the competition of the Afores is based on the commissions they charge and not on the returns they offer to workers, which is depressing, because they only seek to have a greater number of accounts and earn through that commission collection. which is done bimonthly.
COMMITTEE TABLE
Furthermore, it seems very unfair to me that the Afores charge over the balance; And worse still, it bothers me that Consar, the one that regulates and supervises the administrators, is not more severe in the collection of commissions made by this market that continues to accumulate high profits, remember that its profits grew more than 100% in the first half of this year.
When the Afore system was born in 1997, they had three ways of charging commissions: one on balance, that is, if you have a total savings of 50,000 pesos, each two months you are charged a commission on that amount. The second way is about contribution, that is, if each two-month contribution is 500 pesos, you are charged based on that amount. And the third scheme was mixed, that is, the Afore could collect both.
As it was a difficult scheme to compare and also not very transparent, a reform was made in 2008 so that the Afores only charged on balance. And this is where my disagreement comes because charging a commission on 50,000 pesos six times a year is not the same as charging a commission on an amount of 500 pesos. Do the math and you’ll be surprised. Then, if you are a little indignant, look at the returns that your Afore gives you, which Consar presents without reflecting the effect of inflation.
Since 2008, Afores have been capitalized by charging commissions to millions of workers, even those who do not know that they have an Afore.
As of the 2020 reform, the first significant reduction was made to the commissions charged by the Afores so that they were on average 0.57%. But, from my perspective and from what I see in my account statement, the Afores should continue charging less and change the way they charge.
In a report from the Fitch Ratings agency, it was suggested that people who start saving in their Afores should be charged on the balance and after a certain time be charged on contributions. Isn’t this money supposed to be ours and we should decide?