Mexican pension system expands

Assets under management at Mexico's pension fund managers (Afores) climbed to 3.32tn (US$176bn) at the end of June, up 4.1% in real terms from end-December 2017.

The June figure was the equivalent of 14.9% of GDP, according to a report from the finance ministry,

The report indicated a rapid acceleration in voluntary savings in recent years. While all voluntary contributions from 1997 to end-June 2018 amounted to 64.7bn pesos, the total in real terms increased 11.6% from the end of 2017 - and was 304% higher than at the end of 2012.

In the first half of this year, voluntary savings amounted to 7.15bn pesos - 11% of the historic total, showing a 6.1% increase year-on-year.

Citing statistics from the pension regulator (Consar), the report said there were 61mn individual retirement accounts in the Afore system at the close of June, up 1.6% from the end of 2017, adding that the average savings balance in the accounts was 74,1bn pesos.

The investments in the Afore system have generated 1.51tn pesos in capital gains over the 21 years of its existence, with an average annual yield of 11.33% in nominal terms and 5.43% in real terms.