[1] Participants in the Mexican system choose from a variety of private pension fund managers called Administradores de Fondos para el Retiro (AFOREs).
AFOREs are responsible for managing individual accounts and investing savings in the pension funds called Sociedades de Inversion Especializadas para el Retiro (SIEFOREs).
[2] During the Salinas administration, 1984–1994, financial issues linked to the social insurance program and concerns for competition protection induced policymakers to consider a complete overhaul and privatization of the pension system.
[3] However, opposition from labor organizations and the need to maintain their support for the free trade agreement (NAFTA) with the United States and Canada forced Salinas to implement only partial privatization reforms.
[5] As a result of this stark dissociation between contribution levels and earned benefits, workers often avoided paying IMSS salary deductions either by working unofficially or joining the informal sector.
For the Zedillo administration, the severe devaluation of the peso and the subsequent 1995 economic crisis served to expose the potential risks associated with capital account openness emboldening policymakers to search for new methods that encourage domestic savings.
Through government reports and IMSS internal documents, it was discovered that the generous pension scheme enjoyed by the institute's own employees was largely the facilitator of the weak financial performance in question.
From a skeptical perspective, the privatization of the pension system merely serves to expose the Mexican state's direct intervention to create new markets favoring special interest groups, particularly financial corporations.