The Federal Economic Competition Commission (COFECE) gave its opinion that it does not advise to approve the proposal of the Draft Decree in which it is proposed to regulate the commissions of the Social Security Law and the Law of the Retirement Savings Systems.
The initiative establishes a maximum amount for the collection of commissions, therefore the COFECE maintains that if authorized, it would have an inflexible effect to carry out its operation in the Retirement Savings System (SAR) market.
They advise regulating commission procedures. Photo: Reforma
However, COFECE agrees that commissions should be regulated in the market on this item for the following reasons:
Most workers do not make an Afore change, regardless of the amount of commission they are charged as well as the returns they obtain. For this reason, the Administrators do not manage incentives so that they can compete either by granting a lower cost and a better profit. On the contrary, for transfers they do it through commercial spending, and this generates an increase in their cost and also does not provide any benefit for workers. There is no transparency in the current mechanism carried out to establish the commissions charged by the different Afores each year. Likewise, the National Commission of the Retirement Savings System (CONSAR) does not have all the information on the different costs managed by the Administrators in order for their commissions to be approved. It is perceived that with the reform there will be a gradual increase in the employer contribution concerning the level of the workers’ salary, this should facilitate the use for greater savings in the administration of the accounts, it would also be possible that the commissions decrease.
Therefore, they consider that it is essential to modify the current commission approval scheme, and the new proposal maintains that it may be inflexible and also does not have the technical elements to establish it.
The initiative of the new scheme was presented in the Chamber of Deputies, among the main changes is to establish a cap on the commissions charged by Afores, with the aim that they are not higher than the average of others such as in Chile, Colombia and the United States , through a procedure to be determined by the CONSAR governing board.
Starting from the references of the indicators from other countries is a strategy that has been used in the design of regulation, but in practice it is necessary to demonstrate the comparison between savings systems in terms of variables, for example the number of accounts and balances that administers each system, as well as the type of commissions in each country.
In this sense, the initiative does not have an argument about the selection of countries as references for the commissions.
Therefore, COFECE issued to the Congress of the Union, the Ministry of Finance and Public Credit and to CONSAR that it does not agree on the approval but suggests the following:
He argued that the new scheme should not be approved under its terms when the proposed mechanism for regulating fees is inflexible. He also mentioned that it is advisable to have a commission regulation system based on criteria and procedures that avoid determining the maximum limits. predefined, or where appropriate that allows the modification of the commissions concerning the different changes that are shown in the market. He added that better yields should be promoted and that competition also be generated by reducing costs. It also considers that they should be justified with technical and transparent criteria.
Finally, COFECE suggests that while the current commission negotiation and authorization scheme is not modified, the CONSAR Governing Board should establish in its secondary regulations a better and above all transparent procedure regarding their approval.
He added that the procedure must have objective, predictable and transparent criteria, from when the Administrators request the approval of the commissions until it is authorized or not.
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