The sale of Afore Citibanamex opens up the possibility of a greater number of account and resource transfers between retirement fund managers (Afore).
This is because if Banco Azteca or Banorte, candidates to buy the Banamex brand, were to keep the Afore Citibanamex portfolio, it could become the largest administrator of the Retirement Savings System (SAR) with a market share from 20 to 30 percent.
Faced with this possible scenario, the administrators could resort to doing what they did in 2013, when Afore XXI Banorte merged with Afore Bancomer and which gave rise to the largest administrator in the market at that time.
As an immediate reaction, the remaining Afores entered into a commercial war to deal with the merger, which consisted of transferring accounts and resources from Afore Bancomer to other institutions.
In an interview, Carlos Ramírez Fuentes, president of the National Retirement Savings System Commission (Consar) during Enrique Peña Nieto’s six-year term, recalled that when the consolidation of Afore Bancomer with Afore XXI Banorte was authorized, “a barbaric drain of accounts and resources.
The SAR Law, in its article 74, establishes that a worker may change Afore when they merge, but it establishes that “in the case of a merger between administrators, the right of transfer will only correspond to affiliated workers who are registered in the merged administrator.
The former head of the Commission hopes that, in the event of an equal situation, the same thing will not happen as it did nine years ago, since the trade war between Afores clearly does not suit anyone.
Promoters, under the magnifying glass
The promoting agents charge the fund manager a commission for carrying out transfers. For this reason, they have been under the microscope of the Consar in recent years; the government agency estimated that nine out of 10 transfers were induced by promoters.
The Commission has created tools to empower savers, such as Mobile Transfer, and thereby avoid being influenced by a third party to decide which market option is the best for their savings.
As of the end of November 2021, more than 3.4 million transfers had been made. Afore Coppel heads the list of transferred transfers with 834,563. In second place, Afore Citibanamex with 733,686 and Afore Azteca with 501,059.
Currently, there are more than 43,395 promoters with an average monthly salary of 14,830 pesos, according to Consar.
It estimates that the expenses for variable remuneration to promoters by the Afores ranged between 2,830 and 3,870 million pesos from 2015 to 2021. This gave an average cost of 3,340 million pesos in that period.
Regulatory changes sought
To control the practices of the promoters, the Consar seeks to create the figure of “provisional advisor” to replace the promoter agents, the integration does not imply additional costs to the administrators.
Another reason for the new figure derives from the fact that in the SAR there are currently promoter agents and the service agent, who share similar characteristics in terms of training, requirements to function, evaluation, etc., reveals the draft sent to the Commission National Regulatory Improvement.
The new figure would generate a reduction in spending in the Afores and would simplify the regulation of SAR participants. The summary of the savings due to deregulation would amount to 27.2 million pesos and would leave benefits for 3,340 million pesos.
“That the administrators transform their current business schemes so that they focus on increasing the quality of user service and obtaining better returns, always seeking the interest of the workers,” argues Consar.
The change in the remuneration regime establishes that the Afores pay the commission to the agent for two reasons: the registration of the individual accounts made and the Voluntary Savings contributions made by the worker.
In the second point, the commission charge will only be accredited if “it was the result of the management of the promoter agent or pension advisor”. It will not be considered a transfer if the saver makes voluntary contributions.
The new commission collection scheme may not include payments in cash or in kind for transfers of Individual Accounts or the balance of the Individual Account.