Mexico's Sistema de Ahorro para el Retiro (SAR, the national retirement savings system) reached its 29th year of operation with 8.9 trillion pesos in assets under management, the highest figure in its history and equivalent to nearly one quarter of Mexico's gross domestic product (GDP). The figure, reported on July 29 by El Financiero, reflects nearly three decades of mandatory worker savings.
Established in July 1997, the SAR transformed Mexico's pension landscape by shifting from a defined-benefit model, in which the government or employer guaranteed a fixed pension, to a defined-contribution model: each worker accumulates an individual fund throughout their working life. Twenty-nine years on, the system manages 70.4 million individual accounts and already pays pensions to more than 116,000 retirees under the 1997 Law, with replacement rates exceeding 71 percent. For the Mexican community living or having worked in the United States and Canada, the SAR is a relevant asset: individual accounts are preserved even after emigration, and voluntary contributions can be made from abroad.
Afore XXI Banorte, the system's largest fund manager with 19 percent of total assets, holds 28 percent of the country's voluntary and solidarity savings, a segment that already exceeds 99 billion pesos. The system's average historical nominal return stands at 10.7 percent per year, equivalent to roughly 5 percent in real terms. According to Afore data, 56 of every 100 pesos in the accounts originate from investment returns, not from original contributions. David Razú Aznar, CEO of Afore XXI Banorte, noted that the system has reached maturity and that the firm received an Excellent rating from Fitch Ratings this year.
In his anniversary column, analyst Guillermo Zamarripa notes that the SAR is now the primary financial asset of Mexican households, second only to real estate. The 2020 and 2024 reforms raised mandatory contributions and reduced the number of required contribution weeks, two changes that broaden pension access for millions of workers. With a system already delivering measurable outcomes and voluntary savings on the rise, the SAR enters its third decade with the challenge of drawing in more Mexican workers, both at home and abroad.
This article was drafted with the assistance of artificial intelligence from verified sources and reviewed by a human editor before publication.