Supreme Court approves limit on Afore commissions to protect workers' savings

The Supreme Court of Justice of the Nation made a historic decision by unanimously upholding the 2020 reform that limits the fees that pension fund administrators (Afores) can charge workers for managing their individual accounts. This measure, championed by President Andrés Manuel López Obrador, aims to ensure that Mexicans' savings grow securely and that their future pensions allow them to live with dignity in retirement.

The reform establishes that the maximum commission limit is calculated by referencing the average of defined contribution systems in the United States, Colombia, and Chile. This international comparison ensures that pension fund administrators (Afores) operate fairly and that workers do not lose money due to excessive commissions. The Court dismissed the arguments of Invercap, the company that challenged the regulation alleging violations of economic rights and competition, recognizing that state regulation is legitimate and necessary to protect the public interest.

“This savings system is regulated by public order and its main objective is the protection of workers. It cannot be treated as a free market,” stated Justice Yasmín Esquivel Mossa, emphasizing that state intervention guarantees that commissions do not affect the resources accumulated by employees.

For Minister Loretta Ortiz Ahlf, this measure goes beyond financial regulation, as it directly impacts the quality of life of retirees. “Reducing the commission cap aims to ensure that workers have a dignified pension, guaranteeing their right to social security and well-being during retirement,” she explained.

Experts point out that this decision represents progress in protecting the savings of millions of Mexicans, since historically the high commissions charged by Afores (retirement fund administrators) have significantly reduced accumulated capital, directly impacting pension amounts. With the approved limit, it is expected that workers will be able to retain a larger percentage of their contributions and receive fairer benefits upon retirement.

Since its implementation, the Retirement Savings Systems Law has undergone several modifications aimed at balancing the profitability of the Afores (Retirement Fund Administrators) with the protection of workers. The 2020 reform arose in response to demands from workers and specialists, who called for greater regulation in the face of high commissions that significantly reduced their savings.

The Supreme Court's endorsement confirms that the State has the authority to intervene in the savings system to ensure that workers' resources are protected, even against corporate interests. This decision also sets a precedent regarding the role of public law in the economy, reinforcing the priority of social welfare over free competition in strategic sectors.

With the reduction in fees, it is estimated that workers will be able to save more efficiently and increase their pensions, generating a positive effect on household finances and the country's social security system. Furthermore, this regulation could encourage healthier competition among pension fund administrators (Afores), focused on quality services and transparent performance.

Workers, financial analysts, and labor organizations have celebrated the decision, considering that this ruling strengthens social justice and equity in the Mexican pension system.

The Supreme Court's support also sends a clear message: protecting workers' savings is a public interest that takes precedence over any arguments based on free markets or corporate profit. This contributes to building a stronger, more reliable, and fairer pension system for the millions of Mexicans who depend on it for their retirement.