Impact of the digitalisation of financial services on supervisory practices in the private pension sector case study: Mexico
By the National Commission of the Retirement Savings System (CONSAR)
I. Context of the Retirement Savings System (SAR)
1. Mexico introduced a new mandatory DC system of individual accounts in 1997 for private-sector workers (IMSS) and in 2007 for public-sector workers (ISSSTE)1 , both of which replaced old DB systems that had been in place since the 1940s and 1950s.
2. The new system has been relatively successful in creating a big pool of pension savings, as well as providing savers with more transparency and choice.
3. The system started out with 11.2 million accounts and USD 6 bln, inherited from the old DB system. Today the AFOREs handle 60 million accounts and invest USD 180 bln (15% of GDP).
4. Pension funds providers (AFOREs) are in charge of the administration and the investment of the workers’ pension savings. They are also in charge of:
• Handling of the contributions made by workers, government and employers
• Handling of the voluntary savings made by workers
• Registering workers
• On request from a participant, transferring capital to another pension provider
• Sending a pension balance statement to savers three times a year
• Handing accrued wealth back to savers once requisite conditions have been met
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