CONSAR, IDB and Beat Sign Agreement to Incentivize Savings

The National Retirement Savings System Commission (CONSAR) and the Inter-American Development Bank (IDB), in an alliance with tech company Beat, are working on a program to help partner drivers to save for their retirement in a more active way. The main goal is to create an easy to use system in which the drivers that use the Beat application will have an automatic way to save a percentage of their earnings in their personal Pension Funds Manager (AFORE), according to El Economista. 

According to a survey organized among Beat drivers, 62 percent of them are willing to save a fraction of their income through the app. This program is especially attractive to independent workers without a fixed income who are not affiliated to an AFORE but still want to have a savings account that can fill up over the years. 

These are some of the benefits of the agreement, as stated by CONSAR: 

• Facilitating the domiciliation and withdrawal of voluntary contributions
• Generating income on digital platforms facilities saving in an AFORE account

The resources going to the retirement funds are expected to fuel short-term investments to ensure contributors have access to the money in case of any urgency.

This is not the first agreement of this kind. In September 2021, the tech company Didi also signed a similar deal with the same goal of helping independent workers to save for their retirement. Eight months have passed since this agreement. However, no new news have been published, via El Economista. 

The end goal of these types of initiatives is to promote voluntary savings among the general population. “There are 284,635 self-employed workers registered in the Retirement Savings System (SAR), which represents only 0.40 percent of the 70.8 million active accounts; hence the relevance of conducting research to develop new ways to stimulate savings among the population,” states SAR’s general overview of April 2022.

The creation of alternative plans to stimulate savings is a crucial point in personal finance, an area that is lacking in the everyday life of the independent workers, given that only 6.8 percent make voluntary donations to their retirement, says IDB. According to the bank, financial education, voluntary saving and new reforms are the goals to target in the next years, especially considering that 90 percent of the drivers or delivery staff that work for DiDi are not saving any money for their retirement.

“Disinformation regarding retirement savings and lacking behaviors, among other factors, have led informal and independent workers away from retirement savings programs,” highlights the bank in the publication “Savings Without Borders: Lessons from the Interventions of the Retirement Savings Laboratory.”