Afore Coyotes Charge Up to 11,000 Pesos for Jobless Withdrawals
Consar says brokers known as coyotes drive 70% of Afore unemployment withdrawals. See the latest figures and where the Senate reform stands.
Brokers known as “coyotes” have set up in the Metro and charge up to 11,000 pesos to help workers make unemployment withdrawals from their Afore retirement accounts, Expansión reported. Mexico’s pension regulator says it is now going after them.
Julio César Cervantes Parra, president of Consar (the National Commission for the Retirement Savings System), told Expansión that the agency is working with the IMSS (Mexico’s social security institute) to find brokers who change a worker’s registered salary. He said the SAT (Mexico’s tax agency) has joined the same working group.
How big Afore unemployment withdrawals have become
Consar has acknowledged that coyote activity is behind 70% of the high volume of unemployment withdrawals from Afores. From January to September this year, one million 664 thousand people took money out of their Afore on the grounds of unemployment, 18% more than in the same period a year earlier.
The money withdrawn reached 36,222 million pesos. In real terms that is 23.5% above the year before, according to Expansión.
What Consar and the IMSS are checking
An unemployment withdrawal lets a worker take part of their Afore savings after losing a job. Cervantes Parra said the aim of the checks is to confirm that the contributions behind each claim were actually paid. In his view, the right to withdraw has to be calculated only from payments that were really made.
The working group with the IMSS and the SAT targets what he called improper practices, mainly brokers who raise a worker’s recorded salary with no basis for it. He said Consar will pursue them whether or not a new law against the practice passes.
Why it matters for people with an Afore
How much a worker can take out depends on the salary and contributions on file with the IMSS. Consar’s position is that a withdrawal built on an inflated salary, backed by contributions that were never paid, is not a valid claim. Anyone who used a broker could see the salary history in their file reviewed as part of this effort, since that record is exactly what the regulator and the IMSS are examining.
The reform waiting in the Senate
Last year the Chamber of Deputies, Mexico’s lower house, approved a change to article 191 of the Ley del Seguro Social (Social Security Law). It is meant to limit unemployment withdrawals and, above all, to stop the paid intermediaries known as gestores.
The bill attacks the problem in three ways: a cap on the amount, a ban on intermediaries and mandatory validation of each request. Under the cap, a worker could withdraw whichever is smaller: 30 days of their average salary over the last 150 weeks, or 11.5% of the balance in the subaccount for Retiro, Cesantía en Edad Avanzada y Vejez (retirement, unemployment at an advanced age and old age).
The measure has stalled in the Senate. Cervantes Parra said it sits with the upper house’s Comisión de Trabajo y Previsión Social (Labor and Social Welfare Committee). Because the legislative agenda is crowded, the committee is still in a preliminary review and has not begun the formal legislative process.
Source: Expansión
