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Voluntary savings for retirement Carlos Marmolejo, MEXICO

Voluntary savings for retirement Carlos Marmolejo, MEXICO. June 2014. Mexican Pensions System . Current situation. In 1997 the Mexican Pension System was reformed and replaced by an individual capitalization system managed by private pension fund managers (Afores).

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Voluntary savings for retirement Carlos Marmolejo, MEXICO

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  1. Voluntary savings for retirementCarlos Marmolejo, MEXICO June 2014

  2. MexicanPensionsSystem. Currentsituation In 1997theMexicanPensionSystemwasreformed and replacedbyan individual capitalizationsystemmanagedbyprivatepensionfund managers (Afores). 50,878,419Individual Accounts in the System 16,143,422of those Accounts are active.1 1. With at leastonecontribution in a 12 monthperiod.

  3. Pensions The resources in the system will not be enough for most of the current working force to receive adequate pension payments at retirement. Average balance of an Individual Account: US$ 3,169 Replacement rate1 in Mexico: 32% Itisnecessary to increaseVoluntarySavings Percentageof theaverageperceivedwagein thelast 10 years of workthatan individual willreceive as pension.

  4. VoluntarySavings 59%of workers are under 40 yearsold, whichrepresents a widepotentialmarketforVoluntarySavings. • 112,625 • Workers who made those Saving deposits² Consideringalltheaccountswith a positive balance in at leastone of theVoluntarySavingssubaccounts, withoutconsidering a minimum balance. Thesenumbersdon’tconsider PENSIONISSSTE

  5. Availablechannels to makeVoluntarySavingsDeposits • Workers have currently several options to make a Voluntary Savings deposit: Recurrentdebitpayments BankBranch PayrollDiscount Electronic transfer Retail Chains Afore 1 Promotes 1 Afore 2 Promotes 2 Afore 3 Promotes 3 Afore 4 Promotes 4 Afore 5 5 Afore 6 6 Afore 7 Promotes 7 Afore 8 8 Afore 9 Promotes 9 Afore 10 Promotes 10 Afore 11 Promotes 11 Afore 12 Promotes 12 However, it depends on each AFORE’s business model and sometimes it requires additional procedures to make a deposit.

  6. Voluntary Savings collection by retailers 1 • The client will provide the Retailer’s cashier only the following: • ID national number • Deposit Ammount • The Retailer will give the client a receipt that works as the deposit’s voucher (in future implementation phases, will also send an SMS or e-mail) • ProceSAR will centralize the operation between AFOREs and retailers 2 3 retailer Animation

  7. Incentives and Benefits 3. Lotteries 1. Government Benefit (savings matching program) 2. Mobile Airtime and other benefits, depending on the AFORE

  8. Voluntarysavings Voluntary Savings Collection by Retailers Carlos Marmolejo, MEXICO June 2014

  9. Voluntary Savings collection by Retailers I want to make a Voluntary Saving deposit, please Please, give me your ID number or mobile number My ID is ….. Howmuchwouldyouwish to depositin yourAccount? $200 pesos, please Sure, just a second

  10. Voluntary Savings collection by retailers

  11. Voluntary Savings collection by retailers

  12. Voluntary Savings collection by retailers

  13. Voluntary Savings collection by retailers Here, thisisyourreceipt Youhavereceived a VoluntarySavingsDepositfor $200

  14. Voluntary Savings collection by retailers AFORE AFORE AFORE

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