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Afores won in the pandemic: COVID-19 did not stop savings and millions of pesos were obtained in 2020

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Afores made millions of pesos. (Photo: Pixabay)

Despite the blow that the coronavirus pandemic has caused in several aspects, it did not affect the Retirement Fund Administrators (Afores) that keep the savings of Mexicans, according to the National Commission of the Retirement Savings System (Consar) .

The data revealed an outlook in favor of the 10 administrators that operate in Mexico, They acquired around 15.6 billion pesos of profit at the end of 2020.

As for the commissions that workers charge for saving the workers’ resources, the Afores registered more than 37,000 million pesos the previous year.

For its part, a record number marked the retirement due to unemployment in Mexico, due to the COVID-19 pandemic that does not give workers truce. According to the National Commission of the Retirement Savings System (Consar), a historical maximum of partial withdrawals was registered by 20,000 million pesos.

In other words, according to the current panorama of formal unemployment in the country, at least one million 709,000 people withdrew money from their Retirement Savings Administrators (Afores).

Only between December 19 and 24, 2020, about 30,000 unemployment retirements were registered that week, since employees took out 11,089 pesos on average from their savings accounts.

Administrators keep workers' resources during their working lives until they reach adulthood.  (Photo: Pixabay)
Administrators keep workers’ resources during their working lives until they reach adulthood. (Photo: Pixabay)

Between March and November of last year, the Afores that managed the most disbursements were Coopel, Azteca and Citibanamex, with at least 69.1% of withdrawals.

According to Abraham Vela, president of the Consar, 2020 withdrawals are 61% above what happened in 2019.

And is that the coronavirus pandemic continues to shrink the pockets of workers, only the Mexican Institute of Social Security (IMSS) highlighted that around 647,000 formal jobs were lost at the end of 2020.

The Consar also announced what are the amounts that the administrators will charge during this year.

The average commissions that the 10 Afores will apply in 2021 will be 0.87%, a decrease of 11.5 basis points.

In that sense, the Governing Board of Consar authorized the Afores commissions: Azteca, Citibanamex, Inbursa, Invercap, Pensionissste Principal Benefit, Sura and XXI Banorte, which will be applicable from January 1 to December 31, 2021.

The Governing Board agreed to deny the request for commissions presented by Afore Coppel, as it considered that it is excessive for the interests of the workers.

According to the table of approved commissions presented by Consar, the Afore Pensionissste will appear with the lowest commission in 2021, since it will go from 0.79% to 0.53%. It is followed by Citibanamex from 0.88% to 0.80%.

In third position is XXI Banorte from 0.88% to 0.80%, followed by Profuturo which currently has a commission of 0.92% and goes to 0.83%.

Afores announce the amount of commissions for 2021. (Photo: Pixabay)
Afores announce the amount of commissions for 2021. (Photo: Pixabay)

While the Afore with the highest commission is Invercap, which will go from 0.98% to 0.87%.

Thus, Consar’s governing board approved nine out of 10 commissions and denied Afore Coopel’s request.

This reduction is reflected a few days after the pension reform was approved, an initiative of the President of Mexico, Andrés Manuel López Obrador, which will allow, among other things, to retire with fewer weeks of contributions.

According to the government of the Republic, it is a historical change that modifies and ensures the well-being of the people.

It must be remembered that the Afores are in charge of managing the workers’ savings, and must charge a commission, which is applied to each employee.

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Ben Oakley
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