In 1997 the Mexican pension system was transformed from a pay as you go to a private scheme of individual capitalization (defined benefit – DB – to defined contribution – DC -). The reform was implemented in order to face demographic challenges and ensure the future financial sustainability of pensions.
Each worker owns an individual account in which contributions are mandatory for the employer, the government and the employee.
The National Commission for the Pension System (CONSAR) is the regulator and supervisor of Mexico’s pension system and its main objective is to regulate AFORES.
AFORES are private financial institutions in charge of the administration and investment of retirement savings.
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