After almost 6 months of the National Commission of the Retirement Savings System (Consar) decree the prohibition of carrying out transfers of customer accounts between the Aforesthe regulatory body reactivated said mechanism.
As will be recalled, on December 16, the Consar prohibited the transfer of user accounts between the Afores, due to the high levels of capital losses that the system registered at that time.
In fact, last year was the year with the greatest disability for those of us who have a retirement savings accountsince losses were recorded for a total of 215,477 million pesos, something never seen before.
It is evident that the Consar wanted to avoid more “bleeding” than was recorded and unilaterally decided to decree a ban based supposedly on the powers granted by law.
Indeed, the law allows the regulator to act if it detects “abnormal” situations that harm Afore affiliates.
One would only have to wonder if last year’s capital losses were the product of an “abnormal situation” or a direct consequence of market conditions.
Obviously, the Consar tried to prevent more users from realizing their losses and converting them into losses by switching to another Afore, regardless of whether it paid them a better rate or not, let’s remember that losses become losses when selling a portfolio at a lower price. price.
However, the truth is that we will not know how much it was prevented from becoming a loss, it seems more like a damage control measure, and even paternalistic.
The latter is just the theme; Could Consar have done more to prevent users who wanted to switch from Afore from having losses or at least not having such large losses? In exchange for not taking away the user’s right to transfer.
Other actions you did not take
The Consar, as the regulatory agent of the retirement savings system, has the power to issue regulations to protect workers’ accounts, but it also has the obligation to generate healthy competition conditions and, something transcendental, promote financial culture.
It might interest you: What are the consequences of partial withdrawal from your Afore account due to unemployment?
Was the measure to prohibit transfers between Afores adequate in the face of financial volatility?
Possibly yes, although we do not really know how many transfers in adverse conditions were avoided, which would give us an idea of the losses that did not materialize.
However, especially in the retirement savings system, for some reason, the authorities continue to treat citizens as minors.
In no other market in the world have regulatory agents issued operating prohibitions; here, given the evidently low financial culture, measures such as the one previously indicated had to be taken.
What can be done if volatile conditions return?
- The markets are always exposed to volatility, something can happen that suddenly breaks the scenario practically overnight, it is the essence of the markets.
- Losses could be limited by considering a maximum percentage and forcing the receiving station to inform the client what will happen and obtain the authorization of the client that he agrees. If he wants it that way, let him assume it, but there will be nothing hidden.
- The less balance the worker has, the less money he can and must lose if he wants to materialize his disabilities, the intention is to support him in the task of consolidating a long-term patrimony.
- In fact, a report could be consolidated that could be called something like: “loss/gain report of the balance of the retirement savings account for the concept of transfer”; As its name says, it would be a document that informs the user if at the time of transferring his account to another Afore he would have a loss or gain in his balance, even if the other institution to which he would change paid a better rate, since the eventual loss would not be due to said factor but because at the time of selling your portfolio or position the price would be lower.
- The previously existing rule could also be resumed, which stated that a worker could switch to an Afore that paid a better rate, but not to one that paid a lower rate.
- At this point, a current rate is not the same as an average rate. The Consar should demand that the best rate of an Afore to achieve the transfer of a worker’s account be the product of an average of at least one year, that is, apply the long term as a concept, in practice, to get used to the worker.
The foregoing will always favor the Afores that have recorded the best performance over time and will prevent a worker from being seduced by an Afore with an attractive short-term rate. - Definitely the system continues to fail in its essential task, by system we mean all those who participate in it.
They will say that they do a lot in terms of financial culture, that they have made a lot of efforts over the years, no one is saying otherwise, but last year’s economic situation made it very clear that much, much more is needed in this area, otherwise the regulatory authority would not have been forced to make a paternalistic decision such as the suspension of transfers.
The story goes that when astronaut Neil Armstrong stepped on the surface of the moon he said: It’s one small step for a man, but one giant step for mankind.
More or less these types of steps are needed in our country’s retirement savings system to promote financial culture, everyone talks about it, everyone says they do a lot (Afores, authorities, other institutions), the truth is that the delay is evident, the steps are terrestrial, astronomical steps are needed.
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