Mexican Finance Minister Arturo Herrera announced a measure that will reduce the commissions collected by private pension administrators, also known as afores, in an effort to meet international standards, El Financiero reported.
The new measure will result in a 100 billion-peso cut in afores' commissions, equivalent to a 10% increase in a single retiree's pension, Herrera said.
This also aims to reduce the average commissions charged by afores to 0.90%, according to Abraham Vela Dib, head of the Consar retirement saving system agency.
Commissions collected by Mexico's local fund managers are reportedly some of the highest in the world, currently averaging at 0.98%. The amount is double the average commissions charged by similar systems in the U.S. or in Sweden, which are at 0.45% and 0.50%, respectively.
Afores manage 15.6% of Mexico's GDP and are major contributors in the financing of infrastructure projects, the government official noted.
Earlier this year, the Mexican government sent a proposal to Congress that would give investment fund status to afores, allowing them to receive deposits and conduct a broader range of operations.
As of Aug. 28, US$1 was equivalent to 20.02 Mexican pesos.
