Examples of AFORE

An AFORE or Retirement Fund Administrator is a private Mexican institution that is in charge of managing part of the contributions of workers affiliated with the Mexican Institute of Social Security and Institution of Security and Social Services of Workers at the Service of the State) to convert them into funds for retirement.

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These institutions began to offer this service in July 1997 when the Social Security Law was created.

Although this acronym is typical of the Mexican State and its social security laws, in many other countries each government provides a similar system with the same or other names.

How does it work?

The public workers or to the service of the State, must be registered by their employer in the social insurance. Then, the company must deposit, in the name of the employee, a certain amount of money as part of their social security contributions.

The contributions can be used in housing or other programs, but in general they are used to create a retirement fund when by law the citizen must withdraw from the workplace. In other words, the contributions will become the pension you receive with your retirement.

The AFORE are financial organizations that will pool the money in a fund that will be delivered or will simply be available to workers when appropriate. An AFORE works jointly with other institutions , also regulated by the State, which will ensure the proper functioning of the fund program and enforce the duties and rights of the taxpayer.

The money from the AFORE can be withdrawn earlier than expected, either for unemployment or for marriage expenses . Each country regulates these types of aspects.

Characteristics of the afore

  • People will be able to make a kind of additional donation to the monthly contributions to increase the amount of money existing in the AFORE.
  • The companies that provide this service will charge a commission for handling this money.
  • The AFORES are obliged to increase the money of each worker. That is why they make investments with taxpayers’ money, who make a profit from these investments .
  • People will be able to obtain account statements of their accounts in AFORES.
  • If the worker dies before retirement, it is possible to inherit the money from the fund to a relative.
  • Upon retirement from work, the social security institutions will deposit the citizen a monthly amount for personal expenses.

Examples of AFORE

These are the only AFORES available in Mexico:

  • Aztec
  • Banamex
  • Coppel
  • Inbursa
  • InverCap
  • PensionISSSTE
  • Principal
  • Profuturo GNP
  • SURA
  • XXI Banorte

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