In line with the process of structural changes to the pension systems of countries like Chile, Peru and Uruguay, among others, in the region, María de las Nieves Lanzagorta, Vice President of Linking of the Mexican Association of Pension Fund Managers (AMAFORE) talked in the webinar: “Pension Reforms in Latin America: the successful Mexican experience,” organized by the International Federation of Pension Fund Managers (FIAP).

The President of FIAP, Guillermo Arthur, presented the opening address. He reflected on the common diagnosis on how to improve pensions: increasing savings and making the required parametric changes. “However, several reform processes have resulted in other realities not exactly aimed at improving pensions, in some cases even attempting to return to failed mechanisms such as the PAYGO system,” he said.

In the online event, María de las Nieves Lanzagorta referred to the main aspects of Mexico’s pension reform, effective as of the beginning of 2021, highlighting the reduction in the number of contributions required to be entitled to the minimum pension, the increase in employers’ mandatory contributions, the increase in the minimum guaranteed pension, limits on the collection of commissions and higher replacement rates.

She also said that the trend in many countries has been to migrate to savings in individual accounts, mainly due to the decreasing number of young people for each senior, and new ways of working, among other factors.

Referring to the process that enabled a political consensus towards a far-reaching reform, like Mexico’s, María de las Nieves explained that “there was an important understanding by authorities and businessmen of the need to improve pensions. We agreed that it was fair to workers and that there was a low additional savings capacity for each of them, but there was also a very good understanding of the need to be fiscally responsible, that the system should be sustainable over time and not entail higher costs for the State and for future generations.”

View the full webinar here.