Since 1997, the company has specialised in helping Mexican families secure their future through Afore, pension, and loan services. Awarded after rigorous analysis by International Finance’s editorial committee, this recognition honours companies that demonstrate operational excellence, robust corporate governance, meaningful social impact, and significant contributions to the advancement of global financial development.

In Profuturo’s case, the results speak for themselves. As of June 13, 2025, the company was managing eight of the top ten generational funds with the best returns in the system, according to the Net Performance Indicator published by the National Commission for the Retirement Savings System (CONSAR). Its average nominal yield of 8.1% underscores its disciplined and resilient management, even amidst fluctuating macroeconomic conditions.

For Antonio de Jesús Sibaja Luna, executive director of investment strategies at Profuturo, this performance stems from a clear, client-focused vision based on solid fundamentals.

“Profuturo’s resource management is guided not only by its institutional policies, but also by a genuine commitment to our clients. We have shown that it is possible to maintain consistent returns even in challenging and ever-changing economic environments. This reflects our technical capacity, but above all, our commitment to properly managing the retirement funds of millions of Mexicans,” he said.

Beyond its financial performance, Profuturo has strengthened its reputation with a comprehensive strategy that combines operational excellence, innovation, and proximity to its more than eight million clients. The company has been awarded first place in the Corporate Integrity 500 Index (IC500) for five consecutive years. In 2025, it was recognised as an Exceptional Company in three categories for its good corporate practices.

A key pillar in achieving these goals has been financial education. Profuturo stands out as the only Afore to have achieved 100% compliance with CONSAR’s Financial and Pension Education Census for three consecutive years. Additionally, the company has developed digital platforms like Profuturo Asesora, which empowers users to make informed decisions with accessible, life-stage-tailored content.

With a long-term perspective, Profuturo has enhanced its capacity to create social value through programmes such as Proemprende, Profukids, and specific initiatives for women and retirees focused on financial inclusion and intergenerational equity.

During an exclusive interaction with International Finance, Profuturo CEO Arturo García said, “Receiving this award and being named the best Afore in Mexico represents a great responsibility and a source of pride for our entire team. At Profuturo, we work hard every day to offer solid, reliable, and client-focused savings solutions. This recognition motivates us to continue to build a better future for millions of Mexicans.”

Today, Profuturo celebrates this special honour with the same commitment that it shows every day: providing exceptional service and guidance to clients so they can make informed decisions and fully realise the future they envision. Behind every savings choice and every step toward retirement lies a powerful idea: “Your future self.”

The post Profuturo’s long-term vision powers award-winning retirement services appeared first on International Finance.

Following the attack, US Treasury Secretary Janet Yellen, a former chair of the US Federal Reserve, issued a warning.

Janet Yellen said, “We will need to modernise our existing institutions—the IMF and the multilateral development banks—so that they are fit for the 21st century, where challenges and risks are increasingly global.”

She added that the defeat of Russia calls for actions that the World Bank and IMF might not be able to implement.

Yellen, a pivotal figure in the previous Joe Biden administration, was referring to a wide range of issues, including trade disputes that are getting worse, sanctions against Russia, big-power rivalry that is causing geopolitical tensions, and—perhaps most worrying of all—the deterioration of the 80-year-old Bretton Woods institutions that were initially created for this very reason.

Bretton Woods had a crucial role in saving a globe ravaged by conflicts, poor leadership, and geopolitical uncertainty.

Earlier this year, IMF Managing Director Kristalina Georgieva said, “The IMF was formed in 1944 from the wreckage of two world wars. The old-world order was in ruins, and populism had taken over most of the world in the decades before we were born. The IMF was crucial to the world’s remarkable advances in global integration and well-being following Bretton Woods.”

When representatives from 44 countries, led by the United States and the United Kingdom, convened in New Hampshire for the so-called United Nations Monetary and Financial Conference in July 1944, Bretton Woods was established. From the wreckage, they established a new, globally coordinated economic system aimed at growth and restoration. Thus, they established the World Bank and IMF.

“Eighty years later, the global economy is once again in a moment of significant turmoil as countries recover from the pandemic and conflict has flared across Europe, the Middle East, and Africa,” Georgieva continued, “but here we are again. The question that remains in the midst of all of this is whether the Bretton Woods Institutions (BWIs) can handle the demands of a much larger and more intricate global economy. If not, what other options are there?”

Georgieva summarised, “We still face many of the same challenges as when we first started. A military force has once again invaded a neighbour in Europe, and regional conflicts are escalating, increasing the risks to the entire world. Once more, protectionism and populism are growing. In addition, we are battling disruptive technologies like artificial intelligence (AI) and virtual currencies, as well as global megatrends like climate change and the demographic shift.”

Fragmentation of the world economy

The majority of economists concur that, just when the world needs to avoid it, it is breaking apart into Global Economic Fragmentation (GEF).

GEF is seen as a policy-driven reversal of global economic integration that makes it less likely for countries to work together to solve global crises, stops new ideas from spreading in emerging markets, and risks sending money to countries with low incomes. In other words, by concentrating on ourselves, we are regressing.

The IMF, which is facing the possibility of becoming obsolete, explains that “in our increasingly fragmented world, nations have focused on reshoring essential goods and supply chains, including minerals crucial for green technologies, semiconductors, and military hardware due to concerns over national security and geopolitical motives.”

Higher import prices, divided markets, limited access to labour and technology, decreased productivity, and a decline in living standards are the direct consequences, according to the IMF.

Bretton Woods had a crucial role in saving a globe ravaged by conflicts, poor leadership, and geopolitical uncertainty.

Tariffs, subsidies, currency wars, protectionism, industrial policies, and penalties are the causes of this fragmentation. Together, they are suppressing the international trade that may help turn things around. In summary, nations are choosing their own paths and taking opposing positions. This generally undermines Bretton Woods’ primary goal of global financial stability.

Many nations are therefore at risk of experiencing a decline in their wealth. According to recent studies, developing markets and mature economies may suffer long-term losses of up to 4% of GDP. The repercussions? Food insecurity, social unrest, and debt problems, with the most vulnerable countries suffering the most.

A new IMF report estimates that the spread of GEF might result in a long-term drop in global economic production of up to 7%. That would come at a disastrous cost, estimated at over $7.4 trillion.

A situation at a crossroads

Although the phrase is frequently used, economists are certain that we are at a crossroads once again and are not even close to reaching a consensus on a Bretton Woods-style solution.

“We can choose to pursue a path of instability and conflict in the future. Or we can decide on the route of collaboration and mutual gain,” Georgieva said.

However, is it feasible to reform the BWIs? The IMF and the World Bank are facing “existential challenges,” according to macroeconomist Amin Mohseni-Cheraghlou of American University in Washington, DC, who is also the head of the Atlantic Council’s Bretton Woods 2.0 Project.

He provides a long list of examples to support his claims, including the rise of new competitors, revolutionary new technologies like artificial intelligence, and two decades of social and economic upheavals like the Great Financial Crisis, the destruction caused by COVID, and the severe issues brought on by climate change, especially in Sub-Saharan Africa. Furthermore, as non-Western economists frequently note, the GFC and climate change are two of these ills that originated in the West.

Mohseni-Cheraghlou asserts that a significant problem in BWIs is the concentration of power in the wrong hands. In other words, at a time when “economies that are not part of the high-income club are playing an increasingly large role in global trade and finance,” the leadership is firmly rooted in the US, Group of Seven (G7), and European Union (EU).

The United States and the European Union hold almost 40% of the votes, even though “their relative prominence in the global economy has eroded.” Chinese scholars concur, pointing out that Beijing has been denied a position in the BWIs that, in their opinion, is appropriate given its undeniable economic power.

Professor Qin Yaqing, a political scientist at Shandong University, is adamant that a global governance structure that is “multi-level, multi-issue, and multi-organisational” must take the place of what he refers to as “US hegemony” over these institutions. In fact, he shares Beijing’s belief that economic fragmentation is best for China.

It would enable China to “choose allies to achieve various objectives and operate nimbly across regions, issues, and organisations.”

He contends that the disintegration of global governing organisations would ultimately contribute to the collapse of the former hegemonic system.

The belt and road initiative

The majority of Western nations, along with several Asian ones, are undoubtedly concerned about China assuming a more aggressive leadership role in a post-Bretton world. They’re halfway there already. China’s Belt and Road Initiative (BRI) has drawn other nations into Beijing’s web, as noted by American political scientists.

As could be predicted, two of the 24 United Nations members that voted not to denounce Russia’s invasion of Ukraine were North Korea and Russia, while the other 22 are all Belt and Road beneficiaries. The fact that 49 out of the 58 countries that did not cast ballots are also involved in the Belt and Road is maybe more indicative of China’s own predominance among the more disgruntled countries.

We have the option of going down the route of instability and conflict. Or we might decide to follow the route of mutual prosperity and cooperation.

Since their own coffers are far from deep enough, the IMF and World Bank now have to deal with a far more complicated world of international financing.

According to Yellen, “We have been working in billions so far, and experts put the funding needs in the trillions.”

Positively, there are many new lenders available, including sovereign wealth funds, pension funds, regional multilateral development banks, and state-led development finance organisations.

For example, there were more than 40 multilateral development banks and financial institutions at the time of the previous count, but there are now at least 50 solely national development banks. Additionally, a total of 130 sovereign wealth funds are investing $12 trillion. While private pension funds have $42 trillion in assets in their treasuries, public pension funds have $24 trillion worldwide.

Furthermore, the number and financial clout of multinational firms has skyrocketed in the past eight decades.

They “command economic and technological might larger than many countries,” according to Mohseni-Cheraghlou.

Multinational corporations account for a quarter of all jobs worldwide and nearly one-third of the global GDP, based on solid data. In fact, Walmart alone generated more income in 2023 than the GDP of over 170 countries.

To sum up, Bretton Woods was built for a different time period and urgently has to be updated to meet the demands of this new, far more complicated one. The Nixon administration’s 1971 removal of the gold standard, a significant disruption to the system, exemplifies how the institutions have adeptly navigated past challenges.

Despite the challenges posed by “intractable geopolitical tensions,” the Bretton Woods table presents numerous benefits. Some of these, according to economists, include an unjust global tax system, a role in responding to crises like COVID (Yellen thinks the GFC response was “too timid and short-lived”), the quick mobilisation of capital to aid developing nations, and World Trade Organisation reform (China prefers regional trading blocs that allow it to get around WTO regulations). All things considered; this massive package is poised to challenge the foundations of Bretton Woods.

While the Bretton Woods institutions were pivotal in rebuilding the global economy after WWII, their current structure and mechanisms appear outdated in addressing the complexities of today’s interconnected and fragmented world.

The rise of new economic powers, shifting geopolitical dynamics, and evolving global challenges require a radical overhaul of these institutions to ensure they remain effective. This is no small task, but the alternative—a more fragmented world without coordinated economic governance—could be far more destabilising. As the global landscape continues to evolve, the question remains whether the BWIs can adapt in time or if we will see the rise of new structures altogether.

The post Is Bretton Woods still fit for today’s world? appeared first on International Finance.

Ortega worked as a receptionist in a local Communist Party of Cuba office until five years ago. Her monthly pension is 15,575 pesos, but inflation has made it worth less than $5 for the past three years.

She explains, “I try to disperse it across meals, meds, whatever I can.”

She is just one of many elderly Cubans who have become nearly penniless as the communist government, reeling from a severe economic crisis, turns to private industry.

Ortega resides with her dumb and deaf daughter. They’re alone themselves. No other relatives are available to assist.

This was not how the revolutionary generation in Cuba was supposed to live. They received promises of free food and healthcare from birth to death in exchange for their selfless dedication to society.

Che Guevara declared, “Man [will] begin to free his thinking from the irritating requirement of feeding his animal wants through work.”

Even so, many older people are shocked at how quickly the revolution they dedicated their lives to has abandoned them, when they are most vulnerable, as private stores spring up all over the Caribbean island and the bodegas that supply state-subsidised rations become more empty.

According to Ortega, “We lived with a dream, with a commitment. And then, everything vanished.”

A growing segment of Cuban society is the elderly. The population’s increased life expectancy into the high 70s, matching that of the United States and the United Kingdom, was a victory of the 1959 revolution. Currently, 22.6% of people over 60 live alone, with 221,000 of them being women.

The current flight of young people has intensified these trends. Cubans have either joined the Latin American caravans heading for the US border or have discovered methods to migrate to Europe as the country’s economy declines. Although opinions differ, estimates generally concur that the island’s population has significantly decreased from the 11 million people listed in a 2012 census. It was as low as 8.62 million, according to an independent demographer’s assessment recently.

Former ambassador Carlos Alzugaray, 81, adds, “One of the hardest things for my colleagues is that their children are outside Cuba. And after making so many sacrifices, they are now financially dependent on them.”

Alzugaray, a member of the Communist Party, expresses such outrage at the circumstances that he declares, “I would go to a rally in front of the Ministry of Labour and Social Security if some elderly people gathered together tomorrow.”

That is an astonishing claim in a nation where protests are uncommon and virtually never accepted.

“I’ve worked in two different professions,” Alzugaray declares, as he continues, “Both provided assistance to the Cuban Revolution’s government.”

One was a 35-year career in the Ministry of Foreign Affairs. The other was fifteen years as a professor at a university. Additionally, I receive 2,330 pesos ($6.50) per month.

The government’s lack of reaction surprises Alzugaray. He claims that there is no indication that they are concerned about the issue. or that they intend to take action in response. They disregard the problem, as they always do when faced with one.

The six-decade American embargo on Cuba, the communist state’s ailing central planning, and the island nation’s inability to recover from the COVID pandemic are all responsible for the collapse of its economy. Since it appeared for a moment that the government couldn’t afford to import food, shops and other small and medium-sized private enterprises (Mipymes) were authorised in 2021.

Though not everyone has benefited from these establishments, some Cubans who get money from family overseas have found them to be quite helpful. Even an ambassadorial monthly pension is insufficient to pay for a tray of eggs, which costs 2,500 pesos. As a result, it is becoming common to see elderly people staring at necessities like cooking oil that they cannot buy.

The government has now decided to regulate the price of necessities like cooking oil and chopped chicken, blaming the Mipymes for their “speculation.” But even these commodities, should the private stores keep selling them, are too expensive for retirees (cooking oil has a restriction of 950 pesos).

The head of the Ministry of Public Health’s Department of Older Adults, Social Care, and Mental Health is Dr. Alberto Fernández Seco. He contends that Cuba is still in a better position than other nations to handle “a worldwide problem” of ageing because of its “high level of education, balanced nutrition, sports, and access to culture.”

He outlines Cuba’s remarkable efforts to care for the elderly, citing the establishment of 304 Casas de Abuelos, or drop-in centres, where senior citizens can congregate, get meals, and get medical assistance. Also, 158 care facilities provide beds for the poorest of the poor. Claiming the reverse to be true, he brushes away claims that care facility beds are disappearing and that fewer people are visiting the Casas de Abuelos as rates rise.

To share this duty with the private sector, he argues, “We’re starting to design policies.”

These are private businesses that would have been unimaginable a few years ago. For instance, TaTamania provides “personalised care” to senior citizens through the use of “health sector professionals” from six locations located throughout Cuba. Monthly costs begin at approximately $150 and quickly increase according to the individual’s demands.

Most of the money comes from overseas families. The government intends to let these businesses branch out into care homes in addition to home care, with 10% of the costs going toward meeting the needs of individuals without families.

According to Fernández Seco, “Sharing responsibilities with the private sector does not contradict the successes of the revolution.”

Elaine Acosta, a sociologist from Florida International University who founded Cuido 60 to investigate the living conditions of Cuba’s elderly, noted that the expatriate families are aware that 10% of their fees are being redistributed, but the money raised is insufficient to address the problem.

She said, “A bigger issue is that organisations in civil society that could be of assistance are unable to secure funding from foreign foundations or others.”

According to Fernández Seco, the government is also giving older people more rights, such as the option to postpone retirement.

“You can continue working and collecting your income and pension as long as you maintain the appropriate level of mental and physical fitness,” he explains.

He continues, saying that although it might not be what was promised, Cubans should keep in mind how fortunate they are in comparison to citizens of other nations where drug use, human trafficking, and organ theft are issues.

“There are moments when we are unable to recognise our blessings,” he added.

Elvio Agramonte de los Reyes, a bit stooped but carrying himself like the Camagüey man he is, raised in the most courtly of the Cuban provinces, pushes a wheelchair up San Lázaro Street. He is selling a basket of coriander and mangoes to bystanders from the chair.

The 85-year-old said, “I get 1,100 pesos from the government. That’s what I live with, along with what I search for on the streets. I am in a better position. I don’t drink coffee, smoke, or use rum. I did consume a lot of rum, but I developed cerebral ischemia, so they advised me not to touch it anymore.”

Like Martha Ortega, all he has to go on in life is a crippled daughter. She was born with a mental illness. She receives a 2,000 peso pension while not working.

He heard Che Guevara’s call when he was a young man.

“Cher invented volunteer labour. I took part in every activity. I cut, cleaned, and planted cane. Although there are benefits to building schools and hospitals with free medical care, it’s now backfiring like a cow’s tail. For those of us who are elderly and without relatives…” He pauses, and a woman who has come to purchase coriander says, “They are dying of hunger, to fill the void.”

The post Living on pennies: The plight of elderly Cubans appeared first on International Finance.

Energy regulator Ofgem has introduced stricter guidelines to protect consumers after some struggling customers were put on more expensive prepayment metres.

What happens if your bill is not paid?

Your supplier may try to force you to install a prepayment metre or move your current smart metre to prepayment mode if you and they can’t agree on a payment schedule.

Suppliers will now be required to contact delinquent customers at least ten times before installing a prepayment metre to offer them a better chance to pay off their arrears. A “site welfare visit” will also be required.

In extremely rare circumstances, you might be threatened with disconnection if you haven’t paid a bill after 28 days, but you’ll typically be given a metre first.

Your provider cannot disconnect you between October 1 and March 31 if you reside alone or live only with the elderly or minors. Your information may be given by suppliers to a debt collection firm, for which you may be charged more. For late payments, many suppliers additionally impose additional costs.

For gas and electricity, direct debit is typically the most affordable method of payment. Future bills are likely to increase if you cancel a direct debit.

Last but not least, failing to pay your payments could harm your credit and make it more difficult for you to borrow money in the future.

Getting the metre switched to prepayment

The supplier can only install a prepayment metre after exhausting all other options. They are also unable to install metres for customers over the age of 85, those living alone, and those who are terminally ill.

People with ongoing medical needs and households where no one can top off the metre because of physical/mental impairment are also exempted.

To lessen the chance that they may run out of supply, those who are remotely or by warrant pushed onto prepaid metres will first receive £30 of credit.

Additionally, suppliers have been instructed to pinpoint the locations where metres were incorrectly placed, take customers back to their prior rates, and provide compensation.

Things to do if you can’t pay bills

To pay for your real monthly use, you can alternatively ask for a flexible monthly direct debit. Smart metres or frequent readings are necessary for this.

However, since two-thirds of gas consumption occurs in the winter, you must consider the effect of lowering your payments in the summer. You should also ask your provider for an “able to pay plan” based on what you can afford if the direct debit is reasonable but you are unable to pay it.

Your arrears will rise more slowly if you pay something each month, even if it’s less than what is owed, so your supplier could be less concerned about your debt. Additionally, you might choose to have your name put on the Priority Services Register (PSR), a list of households that need additional assistance.

Pensioners, expectant mothers, parents of young children, and those with disabilities are all eligible. If necessary, your provider can also add your name to the network operator record. If you require your electricity supply for medical reasons, Ofgem advises doing this.

You must get in touch with both your gas and electricity providers if they are separate. Your arrears still exist even if you are on the PSR. However, it does demonstrate your vulnerability, which your provider needs to keep in mind.

Also, verify that you are claiming all available benefits. On the independent MoneyHelper website as well as by the charities Policy in Practise, Entitledto, and Turn2us, benefits calculators are available.

Through the government’s Fuel Direct programme, you might also be able to pay off your debt with money immediately taken out of your benefits. Many vendors and nonprofit organisations also provide grants to assist with expenses.

A variety of government assistance programmes are available to aid people with their energy costs, including assistance for households receiving means-tested benefits, pensioners, and recipients of specific disability payments.

In October 2022, the government introduced the Energy Price Guarantee, which set a £2,500 annual cap on the average energy price for a dual-fuel household. This persisted until the end of June when an average annual energy bill under regulator Ofgem’s energy price cap dropped to £2,074. Bills will drop to approximately £1,923 between October and December under the new pricing cap.

Respite for senior citizens

During frigid weather, older individuals and those receiving certain benefits may be eligible for £25 Elderly individuals and those receiving certain benefits in England and Wales can apply for grants under the Cold Weather Payment scheme to help with costs when local temperatures drop to zero or below.

Between November 1 and March 31, it applies if the average temperature is, or is predicted to be, 0°C or lower for seven days in a row. For every week, you are given £25 back. If you receive pension credit, other benefits like some beneficiaries of Universal Credit, or assistance with mortgage interest, it’s typically automatic. For additional information, see our complete cold weather payment guide.

Scotland’s households will receive £50 regardless of the weather.

The Low Income Winter Heating Assistance programme has taken the place of the Cold Weather Payment programme in Scotland. Under this, homeowners who qualify will receive a fixed payment of £50 per year to assist with winter heating expenses.

You won’t need to take any action to receive one because payments will be delivered automatically between February and March starting in 2023. Although the eligibility dates for 2024 have not yet been revealed, you must be receiving one of these benefits. Your eligibility for the £50 payment will be confirmed in writing by Social Security Scotland.

What about veterans?

Veterans and their families who are having financial difficulties paying their energy bills now have access to grants from the Royal British Legion. Non-repayable emergency funds are being made available to people who have served in the Royal Navy, British Army, or Royal Air Force, as well as to their relatives, dependants, and caregivers.

You could receive up to £1,200 (£200 per month for up to six months), depending on your specific situation.

You should automatically qualify if you currently get any means-tested state benefits, such as income support, pension credit, or universal credit. You can still apply even if you don’t qualify for any benefits because the organisation encourages everyone who is having financial difficulties to do so.

You won’t typically receive payments in cash. Instead, depending on your circumstances, you’ll receive things like vouchers to top off your prepayment gas or electric metre, along with a virtual credit card that can only be used to pay utility bills. These can be complemented with vouchers for groceries, clothes, or housewares and last but not least, substitute white goods.

More tips

If you have a combi boiler at home, which means you lack a hot water cylinder and the boiler is connected to a (often white) plastic pipe, you might want to think about lowering the heating flow temperature.

Look for a dial or group of buttons with a radiator icon on the front, often hidden behind a flap. The third number on the dial, or the noon position, should be selected. Choose 60C if the device has a digital display.

Additionally, you might wish to stop the hot water from preheating. To ensure that there is always some hot water available, many boilers turn on and off every few hours, day and night.

Turning it off saves money and is unnecessary in the majority of homes.

Although the organisations listed in the article assist with all energy-related issues, aiding with budgeting and debt is their primary focus. Therefore, these may be ideal if you find yourself in energy debt or if your issues go beyond energy.

If you’re in England or Wales, you can fill out an online form and receive an email response from a skilled adviser by calling the helpline number of 0808 223 1133. You must contact your local Citizens Advice Bureau if you reside in Scotland.

It claims to be able to assist with the majority of energy issues and can also connect you to its extra help section, which can offer specialised assistance to people in vulnerable situations to settle issues with energy companies.

StepChange is a nonprofit organisation that offers free debt counselling to people in Wales, Scotland, and England. You can get in touch with it at (800) 138-1111 or online.

It can collaborate with you to create a unique repayment strategy, set up and oversee a debt management programme for you, or even assist with strategies to eliminate debt if you are unable to make payments.

The Department for Work and Pensions, which sponsors MoneyHelper, offers free, unbiased, and private financial advice to everyone in the UK. It can be reached by phone at 0800 138 7777, online chat, email, or WhatsApp.

It can assist you in locating a free and confidential debt counsellor in your region, as well as provide you with personalised advice and direction on financial matters, including energy bills and how to prioritise debt.

American Debt Line is a nonprofit organisation that provides free, impartial advice on debt to people in England, Scotland, and Wales. You can communicate with it through a webcam or by dialling 0808 808 4000.

It can assist you in creating a debt management strategy and provides a free budgeting tool.

While energy costs are expected to decrease, they are still a concern for many people, which is fine. It’s important to remember that there are options available to help with energy bills, such as flexible direct debit payments, asking for an “able to pay plan,” and seeking government assistance programmes.

It’s also important to keep in mind the consequences of not paying energy bills, including the possibility of a prepayment metre being installed or harm to your credit. If you are struggling with energy debt or issues beyond energy, some organisations can offer assistance with budgeting and debt. Remember, it’s always better to seek help early on rather than wait until the situation becomes dire.

The post Solving the ‘Energy Bill’ dilemma appeared first on International Finance.

“We provide security and advice to guarantee that our client’s future is always the best possible,” stated the leading Mexican financial advising and retirement fund management venture, which received the honour of being the ‘Best Pension Fund Manager’ for the fifth consecutive year by the International Finance Awards.

“This recognition evidences Profuturo’s commitment to the protection of the Mexican population’s resources, helping Mexican workers to increase their savings for retirement, thereby promoting the development of the country,” Profuturo said.

“The company maintains this long-term objective by offering professional advising services to its more than seven million customers. This extensive client base has been developed as a result of Profuturo’s customer-centred approach and a solid operational structure that ensures the implementation of investment management best practices,” it added further.

Profuturo’s IF award confirms its successful investment strategy, resulting in one billion pesos (MXN) managed across its three business lines.

Rising to the top with top-notch services

Profuturo also chaired Amafore’s Investment Committee for three years, promoting regulatory improvements and closer ties with authorities for the benefit of the investment system.

“A fundamental component of Profuturo’s success is its customer service model, which has been strengthened in recent years through the company’s client listening and sentiment programs, which allow it to obtain feedback on its processes, correct these, and show continuous improvement,” the venture told the International Finance.

Profuturo has also strengthened its client advising and communication programs by relying on behavioural economics theories that prompt the company to take proactive actions and improve its future prospects.

The soundness of the above practice has been evidenced by Profuturo’s retirement advising programs, through which the workers are now supported in three fundamental ways: helping them to understand their current situation with respect to their retirement, raising their awareness of the importance of establishing a future vision, and equipping them with the technical and administrative knowledge before they start the pension withdrawal process.

In order to provide its clients with financial knowledge and skills, the company has developed the Profuturo Asesora platform, a microsite focused in raising awareness about the importance of taking personal savings-related actions.

Profuturo’s monthly digital communication program (Digital Advising or Asesoría Digital) has over two million subscribed clients. Each month, these individuals receive their balance as well as financial education materials.

The company promotes the use of the ‘Profuturo Movil App’ to perform various retirement planning actions like checking balances, deposits, withdrawals, and updating data. The app even allows customers to make unemployment withdrawals.

Profuturo CEO, Arturo Garcia Rodriguez, told the business publication, “We are certain that this award stems from the effort and dedication of all Profuturo employees, who strive day after day to provide top-level service to all our clients, with the sole objective of providing a decent pension and a better future.”

“We are proud to be recognized by International Finance for the fifth consecutive year, thus demonstrating our commitment to the future of all Mexicans and the development of the country. This award assures us that we are on the right track, and it encourages us to continue to implement best practices for the benefit of our clients and our beloved country,” Arturo concluded.

The post The ‘Profuturo Way’ of securing Mexicans’ post-retirement life appeared first on International Finance.

A Quick Flashback Of 2022

As of September 2023, pension funds are purchasing bulk annuity policies from insurers, to whom they transfer pension liabilities along with assets, thus reducing balance sheet uncertainty.

As of September 2023, Bank of England’s interest rate stands at a record 5.25%. While those having mortgage payments are feeling the heat, older generations and wealthier households are benefiting from higher rates because they are getting more time to accumulate wealth.

“Rate hikes can boost returns on savings and fixed-income assets such as bonds and annuities (which provide a fixed income stream in retirement),” stated The Conversation.

In short, having a pension fund when the interest rate is high makes it more than a rollicking prospect rather than investing in the stock market in the current financial atmosphere. Reduced consumer spending in this inflation period has resulted in companies making less money for shareholders.

While the big asset managers have now turned positive on gilts, lured in by high yields and the confidence about inflation in the European country is easing, market analysts believe that pension funds, who along with insurers hold a quarter of outstanding gilts, may step back from this ‘optimism’, going by the 2022 rout which saw pension funds dumping UK bonds in fire sales to meet collateral calls from Liability-Driven Investment (LDI) funds.

What Happened Back Then?

In 2022, the then-Chancellor of the Exchequer Kwasi Kwarteng outlined unfunded tax cuts among other fiscal proposals. The move saw yields jumping by about 165 basis points immediately. Pension funds with about 1.6 trillion pounds (USD 1.99 trillion) in LDI programs and interest-rate hedges, which use derivatives overlays, suddenly faced the pressure of posting more collateral against their hedging positions.

“Some were forced to let their hedging positions fall. Others found themselves scrambling to sell out of liquid assets — including gilts, thereby exacerbating plummeting prices — and then also rushing to offload illiquid assets in order to raise the cash they suddenly needed. And for some of the pension funds whose LDI positions were leveraged, the problems were even greater,” commented a report from Pension&Investments, while recollecting the period.

“On September 28, the Bank of England stepped in to backstop the gilt market. It stood ready to buy up to 65 billion pounds in gilts over about two weeks. Gilt markets calmed, pension funds rethought their collateral buffers and regulators reinforced the needs for these enhanced measures, stipulating that LDI programs should be able to absorb a minimum 250 basis points shock in the gilt markets,” it added further.

LDIs, which are employed in final salary pension plans and other fixed-income schemes (in order to cover liabilities by acquiring assets and generating returns), use long-dated British government bonds as collateral to raise cash.

The whole crisis pushed down LDI prices and sent the value of their assets below that of their liabilities, thus bringing insolvency worry into play.

Have Things Changed?

However, the sector is showing signs of recovery as the deals between pension funds and insurers reached a record 20.2 billion pounds in the first half of 2023, as per an estimate from pension consultants Lane Clark & Peacock, which expects a surge to 45 billion pounds this year and as much as 600 billion pounds over the next decade.

As per the Van Lanschot Kempen Investment Management estimates, while pension funds currently hold roughly 50% of their assets in gilts, insurers only hold 15%. The study expects insurers to sell 100 to 150 billion pounds of the gilts they take over from pension funds in the coming years.

The pension fund sector is selling 240 billion pounds of debt so far in 2023, a record figure. The amount private buyers need to buy will remain elevated for years as interest payments rise and the BoE, its biggest creditor holding 30% of its debt, decided in September to reduce its holdings faster, by 100 billion pounds over 2024.

The UK Debt Management Office told the media that it was aware of the pensions’ transfers and their potential to impact gilt demand, but expected pension funds and insurers to remain a “very important” investor base, while continuing to show strong demand for longer-dated gilts.

The Hunt Plan

The UK chancellor Jeremy Hunt is now attempting reforms which will make fund managers invest more boldly, thereby expanding the pensions’ pots at a never-seen-before scale.

“These plans would mark a major change for pension funds which traditionally keep most of their money in assets viewed as safe and long-term sources of income and capital growth. This steers them towards shares (equities) and bonds (traded debt) issued by large established companies, and government bonds, considered the safest form of debt,” commented a Conversation article, while discussing the Rishi Sunak government’s reform plans.

According to the Sunak government’s calculations, the roadmap may ensure an extra 50 billion pounds of investment into innovative firms by 2030, thus giving a 12% (1,000 pounds a year) boost to the pension of an 18-year-old who enrols in a pension fund in 2023.

As indicated by the UK Treasury, doubling public sector pension funds’ holdings of private equity to 10% of their portfolio would unlock another 25 billion pounds worth of investment by 2030.

While the Bank of England welcomed Hunt’s plans, it needs to cooperate with the roadmap by relaxing interest rates further, which, given the current inflation scenario, looks unlikely.

The Road Ahead

Apart from eating into household wealth, curbing consumer spending and further reducing the incentive for business investments, the 5.25% BoE interest rate is forcing investors to lock the money safely in bank deposits/government bonds.

Add the Brexit, which has hampered the channelling of funds into British companies. Initial Public Offerings (IFOs) in the UK too dried up in 2022 after a 2021 revival.

Hunt’s plan is simple, to simplify rules for new company listings, and make London the next global stock hub. Making pension fund managers invest more boldly is just one part of the master plan.

The 2022 gilt crisis has definitely exposed structural flaws in the UK pension system and everyone from the Bank of England to Member of Parliaments are asking for an overall system reform, a demand which the Rishi Sunak government must pay attention towards, as its plan of making the sector bold will depend upon the latter’s solidity against market headwinds.

The post IF Insights: Tracking the recovery path of UK pension industry after 2022 ‘LDI Crisis’ appeared first on International Finance.

February 15, 2017: When faced with the need to invest safely and capitalise our savings we often ask ourselves if this is possible. Our first and immediate answer will be no, as every investment involves some level of risk, with the possibility that it can lose value. But let us explore further and not be carried away by this first assumption.

While it is a fact that in most countries the pension fund is legally ‘untouchable’, there have been constants episodes where companies or governments supported by the sparse or better said ‘bad regulation’ of supervisory agencies, much often motivated by greed, easy money and, let’s be honest, low levels of financial literacy among consumers, make decisions that do not contribute to our goals. Consumers are simply not involved with the decision making, and they are rarely made aware of the funding status or investments held by the managers.

The relative risk of investments varies widely. Indeed, some investments are inherently more risky than others, but a good start to investing safely is improving our financial literacy and educate ourselves on which types of investments are available on the market, theirs returns and, of course, what are the associated risks.

In order to reduce our investment risk, we must understand it first, as the more we get to know, the more comfortable we get to making good and financially responsible decisions.

Looking at investment offers in the market, we have on one end the spectrum of super-safe investments with low returns and on the other end, riskier but higher-yielding alternatives. It is a mistake, however, to think that this is a general rule. Alternative investment options exist — like the forex market where each trader choses how much risk he wants to assume and not the broker. This is just another example of our lack of financial knowledge. Indeed, the fact that banks aren’t capable of delivering decent returns, doesn’t mean that it isn’t possible.

Finally, and getting back to my question, the secret to investing safely as you climb up the risk/reward scale is knowledge. The more you know, the better you can discern which risks to take and which to avoid. Never let an opinion decide for your own investments — no one needs a bachelor in finance to take his finances into his own hands.

And, of course, don’t invest money that you do not have. Investments will always involve some level of risk and you don’t want to owe money that you cannot afford to pay. Last but not least, remember that the financial market is ever changing — never stop learning.

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Days after a December 5 eurozone agreement to approve some debt relief, Tsipras announced a Christmas bonus for some 1.6 million low-income pensioners and committed to restore a lower sales tax rate for Aegean Sea islanders. The move surprised the eurozone creditors, who suspended the debt relief.

Tsipras said at an EU summit that there is room for ‘a breakthrough, without blackmail’. He will be making his case on his country’s debt problems when he calls on German Chancellor Angela Merkel in Berlin.

He expressed confidence the dispute with European bailout lenders will be resolved soon.

“I, as you can see, am extremely calm, and think it is something that will be overcome very soon. The (Christmas bonus) does not in any way threaten the bailout program and the targets for the 2016 budget surplus,” Tsipras said, adding that bailout creditors are preparing a report on the issue.

He said Germany is the only European country to question the bonus.

“It is unacceptable for some to try to revive a negotiating game to the detriment of Greece and its people, which has made huge sacrifices in the name of Europe,” Tsipras said. “This is not reasonable.”

He also accused the IMF of pressing Greece to adopt new austerity measures after the end of the program. “No democratic parliament … could accept such a demand and decide on measures to be implemented, if needed, after three years,” he said.

EU Parliament President Martin Schulz, another socialist, came to Tsipras’ defense, although he acknowledged that strictly speaking, the Greek government’s decisions have not complied with what was agreed to.

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Nigel Green

October 31, 2016: The Brexit-battered pound has triggered a significant surge in people seeking advice on moving British pensions out of the UK.

Since the UK’s historic vote to leave the EU, the sterling has fallen in value 14.5 per cent against the euro and 18 per cent against the US dollar.

The pound has experienced major volatility since the Brexit vote was announced.  This turbulence is likely to continue as there are still no definitive answers to the important questions about Britain’s future relationship with Europe or the rest of the world.

The plummeting value of sterling has an important negative impact for the millions of Britons overseas who live off a fixed income from Britain, such as a UK pension. The cost of living becomes more expensive and a proportion of their disposable income is eroded away.

For instance, there are a reported 1.3 million Brits living in the US, about a quarter of these are retirees. The majority of these 312,000 people will have taken an 18 per cent hit to their UK pension incomes since the referendum.

Brexit is biting those abroad with a British pension.  Therefore, they are, sensibly, considering their options about how to Brexit-proof their retirement incomes.

We’ve experienced a 21 per cent hike in global enquiries about moving British pensions out of the UK since the Leave campaign was victorious.  The enquiries are from those already living outside the UK and from people currently in the UK planning to retire abroad.

This considerable surge potentially represents hundreds of millions of pounds of retirement funds leaving the UK as people seek to safeguard their retirement funds by transferring them into a secure, regulated, English-speaking jurisdiction outside Britain.

An established way to help mitigate these problems of currency fluctuations, which can seriously erode retirement income, is to transfer your UK pension into a Qualifying Recognised Overseas Pension Scheme, or QROPS.

One of the main benefits of a QROPS is that you can choose which currency you wish to receive payments in. This eliminates the risk of exchange rate fluctuations, which makes the individual’s financial situation more predictable, consistent and secure.

Given the ongoing and growing Brexit fallout, the trend for people seeking advice on overseas pensions transfers is expected to gain momentum over the next couple of years and beyond.

Nigel Green is the founder and CEO of deVere Group

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September 08, 2016: bfinance, the leading independent investment consultancy, has been appointed by the Brunel Pension Partnership, an investment pooling project, to undertake an independent review of the plans to pool the investment assets of ten local government pension funds. bfinance secured the mandate following a competitive tender involving leading investment consultants.

Announced in 2015, the Brunel Pension Partnership is an investment pooling project, which was set up to explore the options for pooling the investment assets across ten funds in the South-West, including The Environment Agency Pension Fund, and the Local Government Pension Funds of Avon, Buckinghamshire, Cornwall, Devon, Dorset, Gloucestershire, Oxfordshire, Somerset and Wiltshire.

With collective pool assets of £23 billion, the project aims to achieve savings over the longer term from both lower investment management costs and more effective management of the investment assets.  Funds that are part of the Brunel Pension Partnership envisage that the pooling of assets will result in net savings of c. £16 million annually, and a potential to increase savings to £70 million per annum over time.

bfinance has been engaged to provide independent investment advice to the Brunel Pension Partnership, which is to establish the Brunel Company, an FCA-authorised business.  This will be responsible for managing the assets of the pool. bfinance will be involved in key areas of the pooling plans, including providing independent advice on the 22 proposed portfolios that will be made available to the funds, as well as reviewing the specifications for the portfolios, including structure, fee levels, and projected savings.

Sam Gervaise-Jones, Head of Client Consulting, UK & Ireland at bfinance, said: “We are very pleased to have been appointed by the Brunel Pension Partnership to conduct this review. Brunel is the first pool to request a formal review of its pooling plans and we are confident that there will be more pooling projects turning to investment consultants for expert investment advice on how best to execute their plans.

While the landscape for consultants has changed significantly since UK public pensions started pooling their assets, we believe there are significant opportunities for investment consultants to be involved. There remain a lot of niche areas that will require the investment expertise of consultants depending on the implementation route that is chosen.”

Matthew Trebilcock, Brunel Pension Partnership, said: “We welcome our partnership with bfinance and are confident that their specialist expertise and experience in the competitive landscape of pooling funds will provide us with a thorough and tailored cost benefit analysis of the proposed investment portfolios that the Brunel Pension Partnership have designed for the ten funds that are part of the project to ensure that it is the most appropriate approach for the Partnership.”

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