MEXICO - Finance
President, The Mexican Association of Administrators of Retirement Funds (AMAFORE)
Bernardo González Rosas has been President of AMAFORE since 2019. He has more than 20 years of experience in Mexican financial sector. In 2021, he started working for the World Bank as a financial sector expert. He also previously worked for different multilateral organization such as the Inter-American Development Bank and the Development Program for the UN and was assistant secretary for development banks at the Ministry of Finance. For more than six years, he was a financial sector regulator, first as vice president for regulatory policy at the National Banking and Securities Commission (CNBV), assistant secretary for banking, securities, and savings at the Ministry of Finance, and finally chairman of CNBV. He holds a bachelor’s degree in business administration with specialization in finance from ITAM and a master’s of science degree from McCourt School of Public Policy at Georgetown University. He has taught public finance at ITAM and Universidad Iberoamericana.
One of the main focuses of the industry was the reform approved in December of 2020, but that came into force mainly throughout 2021. Another focus was the 6,000-7,000 workers who requested early retirement and have been eligible by meeting the minimum required work duration. The system has been implementing modifications to incorporate new parameters for retirement in Mexico. In fact, the economic development cooperation recognized our savings system as the most progressive of all OECD countries because it precisely incorporated modifications that achieve a relevant improvement both for the number of workers eligible for retirement and the pension they can receive, which has more than doubled the minimum guaranteed pension. Meanwhile, another achievement of the year relates to capital gains. Although markets were more volatile, and returns were more discrete than in 2020, the system is still in surplus. This means that portfolios remain well diversified and that even despite sudden currency rate increases as observed in Mexico, that are known to reduce the value of bonuses, especially fixed income, returns are improved or and losses offset by these principles of diversification. This was an opportunity for AMAFORE to show that if the Mexican population is backed by a powerful financial system, we can cope with times of crisis.
There are several associations in Mexico’s financial sector that represent different entities. The truth is that retirement funds (AFOREs) have achieved much greater relevance over the past 24 years. Today, we administer the equivalent of 20% of the country’s GDP. The Business Coordinating Council (CCE), the largest association of companies in Mexico that combines all industry associations, has just accepted us as a part of the executive committee, where all relevant sector decisions are made. Obviously being part of that council sends two extremely important messages: that the industry has reached a very relevant size as the main institutional investor in the country; and, second, that they trust the association as an interlocutor to discuss issues of the greatest relevance to private sector decision making. We are extremely pleased because in 25 years the Business Coordinating Council had not accepted any new members for that executive commission.
The AFORE Industry is actually the first industry that decided to become the “poster child” of environmental, social, and governance (ESG) investing in Mexico. As an industry, we are managing the workers’ savings, and therefore we should not be irresponsible on how these resources are invested. We have a fiduciary duty to the workers and the main responsibility is achieving a better future for Mexican workers. So, in that sense, we are very vocal; the most visible investors and promoters of ESG investing. There is an essential requirement for allocating worker resources into to ESG compliant investments. In this sense, as of 2022, AFOREs will also be the first financial entities in Mexico obliged to invest in ESG by regulation. The Sustainable Green Finance Council is one of the most important green finance organizations established in Mexico, and it was created within the private sector. It is headed by of one of the AFOREs chairman, and we have been actively involved, because we want to achieve better acknowledgment of people of the relevance that investments and financing can do in matters as global warming, for example. We must get the entire financial sector on board. Imagine if you will, the power not only of investments but of credit, of all financial services if conditioned to the fact that what they finance must have ESG certifications. We can certainly move the needle to ensure that all activities have the stamp of sustainability.
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