The National Commission of the Retirement Savings System (Consar) sent a draft to the National Commission for Regulatory Improvement (Conamer) to modify the calculation of the Net Return Indicator (NRI). The document proposes to eliminate the Pension Unit from the formula to make the metric clearer.
The only thing it does is remove the pension that was expected (for the worker) because it made noise in the information that was given (…) it is to simplify the information received by the account holders to be more understandable, it is progress, “he commented. Iván Pliego Moreno, president of the Consar, to El Economista.
As a precedent, in 2019, it was published in the Official Gazette of the Federation (DOF) that the IRN be expressed in Pension Units, this to give a more adequate view of the added value (performance measured in pension) of each administrator of retirement funds (afores), which allows reporting the level of pension that the worker can obtain from the total amount of their resources.
“The account holders do not understand what it means. The Afore explains to them, but it is still confused, it was an estimated value of the pension that made the formulation more complicated, so it went back to how the IRN was historically integrated”, said the president of Consar.
When questioned about the reaction that the 10 SAR participants had on the document submitted to Conamer, the public official said that the majority agrees with the possible change.
“In general, the sector is aware that there is still a need to be closer in informing workers with the greatest detail and simplicity,” said Pliego Moreno.
The Net Yield Indicator weights short-term (36 months), medium (60 months) and long-term (120 months) yields to reflect the consistency of the Afores and, as already stated, based on Pension Units.
“With this weighting, long-term performance is favored, since it weighs 50% of the indicator, and recent performance is captured, since the performance of the last 36 months is included in the three measurement periods,” Consar explained.
Other factors that are sought to be modified in the preliminary draft are the homologation of terms of the IRN Circular and that of the Siefores Investment Regime and changes in the methodology in the Investment Conditions Indicator to seek to better recognize and identify periods of volatility. for the assignment and reassignment process. This would help prevent periods of volatility and losses from materializing.
Part of the SAR reengineering
Pliego Moreno commented that this change that is sought to be made is part of the reengineering of the Retirement Savings System (SAR), as well as the simplification of information so that account holders make the best decision in their Afore account.
The change in the calculation will not affect the list of the Afores with the best yields in the generational Siefores, Consar explained.
If the preliminary draft is approved by Conamer, and subsequently published in the DOF, it will be added to the changes in the collection of commissions from the promoting agents and from the fund administrators themselves; to the creation of the pension adviser; to the amount that the Afores allocate to the special reserve, and to the changes in the investment rules of mutual funds.
The document also seeks an exemption from the Regulatory Impact Analysis by Conamer.