Voluntary savings are one of the pillars that will guarantee the sustainability of the pension system in Mexico and, at the same time, will ensure that workers have sufficient income when they reach retirement, considered Guillermo Vilchis, Institutional Sales Executive at Vanguard Latam.
The specialist said that despite the reforms carried out by the government in recent years, the mandatory contributions will not be enough to cover the needs of the majority of Mexicans in their retirement stage.
“This is where voluntary savings play a fundamental role, offering a powerful tool to complement future income,” highlighted the specialist.
According to the expert, in an analysis in which the institution to which he belongs participated, carried out together with México ¿Como Vamos?, it was identified that promoting voluntary savings requires innovative measures and an organized public policy.
Among the recommendations, the automatic enrollment of employees in private retirement plans stood out, a measure that could significantly encourage workers’ participation in complementary schemes.
“These types of initiatives not only promote savings, but make it a natural part of the work cycle,” said the expert, emphasizing the importance of simplifying this process.
Another critical challenge facing the future of pensions in Mexico, he said, is serving informal sector workers, who represent more than half of the workforce in Mexico.
For this reason, Vilchis commented that there are proposals such as linking the opening of retirement savings accounts to government procedures, such as obtaining a driver’s license or the INE, which seek to guarantee that this segment has access to an Afore and, with Therefore, start building a fund for your future.
“We believe that these are examples that could help a lot to encourage voluntary savings,” he highlighted.
In the long term, he indicated that voluntary savings not only benefits workers, but also strengthens the country’s financial system by channeling resources toward investment projects that drive economic development.
However, he explained that its success will depend on a joint commitment between administrators, the government and employers to promote a savings culture from the early stages.
Thus, a more solid pension system would be built and a working population better prepared to face the challenges of retirement, commented the specialist.
Volatility and investments of Afores
On the other hand, he highlighted that Afores’ investments in a diversified manner are a “shield” against the economic uncertainty that is currently plaguing the world.
“One of the most important Vanguard investment principles is the issue of diversification… Diversification seeks to cushion certain movements in the markets in different asset classes,” explained the specialist, recognizing that there is currently uncertainty in global financial markets.
He added that “by regulation,” Afores have to be highly diversified. Regarding current volatility, he pointed out that in times of elections, geopolitical movements or similar events, there is evidence that you must always think in the long term to invest.
“If your investment horizon is long-term, you are going to encounter many events along the way. It is important not to constantly look for the right time to enter and exit the market, but to stay invested in the market,” Vilchis said.
Recently, the president of the National Commission of the Retirement Savings System (Consar), Julio César Cervantes Parra, pointed out that the US elections affected the Afores. Data from the institution itself indicated that losses of 74,218 million pesos were recorded during October 2024.
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