Mexico’s Pension Funds Manage MX$8.3 Trillion in 2025: Consar

Resources managed by Mexico’s Retirement Fund Administrators (Afores) reached 23.8% of national Gross Domestic Product (GDP) at the close of 2025, up from 20.3% at the end of 2024. According to a year-end report from the National Commission for the Retirement Savings System (Consar), total assets under management rose to MX$8.3 trillion (US$488 billion), driven by record investment gains and a scheduled increase in mandatory employer contributions.

This milestone caps nearly three decades of evolution for Mexico's Retirement Savings System (SAR), which was launched in 1997 to replace an insolvent pay-as-you-go pension model strained by demographic shifts and economic volatility. The system’s early years were turbulent: the 1994 Tequila Crisis erased initial gains, while the 2008 global financial crisis pushed real yields to -5%. Structural reforms in 2013 expanded coverage from roughly 30% to more than 70% of formal workers by mandating universal enrollment.

Growth accelerated under recent administrations, with the system accumulating MX$3.338 trillion in investment gains since 2018. However, this expansion reflects a longer-term trajectory: assets stood at roughly 15% of GDP in 2018, underscoring steady development supported by regulatory changes such as fee caps and broader investment diversification. While the current 23.8% ratio remains well below that of regional peers such as Chile (around 70%), it exceeds Brazil’s level (approximately 15%), positioning the SAR as a maturing pillar of Mexico’s financial system.

In 2025 alone, SAR assets grew by MX$1.5 trillion, representing a 22% annual expansion. For the first time in the system's 28-year history, annual investment gains (plusvalías) surpassed MX$1 trillion, reaching MX$1.14 trillion. “This dynamism has allowed for the accumulation of MX$3.338 trillion in investment gains, directly strengthening the wealth of approximately 70 million individual accounts,” Consar said. The regulator noted that 57 of every MX$100 held in worker accounts now stems from investment returns. Average yields reached 16.8% in 2025, compared with a historical annual average of 10.7%.

Worker Impact: Gains, Gaps, and Inequality

Despite strong aggregate performance, outcomes at the individual level remain uneven. Average account balances rose to MX$118,000, generating roughly MX$20,000 annually at 2025 yield levels—an important supplement but insufficient for full retirement security. According to Consar projections, a 40-year-old manufacturing worker with 20 years of contributions could accumulate MX$2 million to MX$3 million by age 65 with consistent saving.

Coverage gaps persist. Only about 55% of Mexico’s roughly 60 million informal workers participate in the system, leaving millions without retirement protection. Gender disparities remain pronounced: women hold average balances roughly 30% lower than men due to wage gaps and career interruptions. Younger workers, particularly those under 30, often opt out, viewing retirement savings as a distant concern. Regional inequality is also evident, with rural account balances averaging roughly half those of urban counterparts. Overall, the top 10% of savers control about 40% of total assets.

Authorities have sought to address these gaps through voluntary contribution mechanisms for the self-employed, but adoption remains limited, with participation rates near 5%. Asset growth has been reinforced by the 2020 SAR reform, which established a gradual increase in mandatory contributions. Employer contributions rose from 8.5% of salary in 2024 to 9.5% in 2025 and are scheduled to reach 10.5% in 2026, with a final target of 15% by 2031.

Broader Economic Impact

Beyond retirement security, the SAR has become a major source of domestic investment. Afores have channeled more than MX$2.2 trillion into Mexican companies, supporting an estimated 500,000 jobs through investment multipliers tracked by INEGI. Infrastructure has absorbed more than MX$1 trillion, financing projects such as the Maya Train through FIBRA E vehicles and supporting more than 4,000 kilometers of highways. Energy investments totaled roughly MX$300 billion, helping stabilize Pemex’s financing, while housing received about MX$40 billion.

Afores also play a stabilizing fiscal role, with roughly 25% of portfolios invested in government bonds. Banxico estimates the system contributes between 1% and 2% to annual GDP growth. However, concentration risks remain, as infrastructure assets account for nearly 30% of portfolios, exposing funds to policy and regulatory shifts, as evidenced by volatility in CFE bonds in 2024.

Afore Profits and Fee Trends

While worker balances reached record levels, Afore administrators also posted strong financial results. Net profits for the 10 Afores operating in Mexico totaled MX$14.348 billion in 2025, a 30% increase year over year and the highest real-term level since 2021.

Revenue from management fees rose 15% to MX$40.105 billion. Consar attributed the profit increase largely to market performance, noting that regulations require Afores to invest a portion of their own capital alongside worker funds, aligning their financial results with portfolio gains.

The top profit-generating Afores in 2025 were:

• XXI Banorte: MX$3.0 billion

• Profuturo: MX$2.671 billion

• Banamex: MX$2.443 billion

• SURA: MX$2.212 billion

• Coppel: MX$1.231 billion
   

Despite higher total fee revenue, the average fee charged to workers continued to decline, falling to 0.55% in 2025 and set to decrease further to 0.54% in 2026. Consar estimates the reduction will save workers MX$6.9 billion in 2026 alone.

Unemployment Withdrawals and Regulatory Challenges

The system faced a countervailing trend as unemployment-related withdrawals reached a record MX$39.118 billion in 2025, a 26% increase year over year. Approximately 1.94 million workers accessed this benefit, representing a 13% rise in transactions.

Consar attributed much of the increase to “unusual and illegal practices by external intermediaries,” rather than labor market weakness, noting that Mexico’s unemployment rate remains near historic lows. These intermediaries, commonly known as coyotes, often mislead workers into making withdrawals and charge commissions for a service that is legally free.

“This issue of the coyotes is a relevant problem,” said Consar President Julio César Cervantes. He said such intermediaries exploit regulatory gaps, in some cases withdrawing up to MX$35,000 from an account and charging fees of up to MX$10,000.

The Mexican Association of Afores (Amafore) offered an additional technical explanation, noting that higher minimum wages—from MX$88.36 per day in 2018 to MX$248.93 in 2025—and rising account balances naturally increase the maximum amount workers can withdraw. Current rules allow withdrawals equivalent to either three months of the worker’s last salary or 11.5% of the accumulated balance, whichever is lower.

The Afores with the highest unemployment withdrawal volumes in 2025 were Coppel (MX$8.31 billion), Azteca (MX$6.961 billion), and Banamex (MX$5.9 billion).