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Pension Reform in Mexico: The Evolution of Pension Fund Management Fees and their Effect on Pension Balances

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Listed:
  • Emma Aguila

    (RAND)

  • Michael D. Hurd

    (RAND and NBER)

  • Susann Rohwedder

    (RAND)

Abstract

In 1997 Mexico introduced Personal Retirement Accounts (PRAs) which, after a transition phase, will completely replace the pay-as-you-go (PAYG) system. We give a detailed overview of the relevant institutional framework, the market of PRA providers and how it has evolved since the 1997 reform. We use administrative data obtained from CONSAR, the regulatory agency of the PRA system to assess how pension fund management fees affect pension accumulations. We find that fees can drain up to a quarter of individuals’ pension savings.

Suggested Citation

  • Emma Aguila & Michael D. Hurd & Susann Rohwedder, 2008. "Pension Reform in Mexico: The Evolution of Pension Fund Management Fees and their Effect on Pension Balances," Working Papers wp196, University of Michigan, Michigan Retirement Research Center.
    • Handle: RePEc:mrr:papers:wp196
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    References listed on IDEAS

    as
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