Impact of Volatility on Afores: Million-Peso Losses in October
The uncertainty in the markets ahead of the elections in the United States affected the Afores. According to the National Commission of the Retirement Savings System (Consar), in October, there were reported losses of 74.218 billion pesos. This loss broke a streak of five consecutive months of profits that the Afores had been experiencing. In total, from January to October, the Afores have achieved capital gains of 556.437 billion pesos, a figure that significantly surpasses the 61.323 billion pesos earned during the same period in 2023.
Increase in Unemployment Withdrawals In October, withdrawals due to unemployment by workers reached a record, with an outflow of 3.39 billion pesos in resources intended for those who lost their jobs. This figure represents a 32% increase compared to October of last year. Consar has also pointed out that there are irregular withdrawals involving workers colluding with "coyotes." Julio Cervantes, director of Consar, mentioned that some Afore advisors were assisting people in making these withdrawals in exchange for commissions, leading to the implementation of measures in collaboration with the Mexican Social Security Institute (IMSS) to tackle this issue. During the Amafore 2024 meeting, Emilio Bertrán, director of Afore SURA, stated that they have discovered companies or firms that simulate a high salary to then apply for unemployment benefits. "They register you with a high salary and then fire you. After 46 days, you can make your unemployment withdrawal, reaching a maximum of 28,000 pesos," noted the executive. With the new regulations from Consar and IMSS, it’s intended that unemployment withdrawals will be based on the average salary throughout the worker's career, not just the last salary. "It's important to clarify that this is not fraud, because people are withdrawing money from their accounts, but what is happening is a mechanism to simulate salaries that they really don't have," he added.
This phenomenon highlights the need for stricter and more effective regulation in the sector, especially during times of economic uncertainty and policy changes. Moreover, it is essential for workers to be well-informed about the proper use of their retirement savings resources to avoid falling into irregular practices that, while seemingly beneficial in the short term, will negatively impact their financial future.
