Are they going to expropriate your retirement savings? The truth about Mexico's new infrastructure law

Last week, while Congress was cooking up one of the most controversial laws of the year, I was watching a video about wakeboarding in Barcelona: Cable Park session + transfers. Sounds flash, I know. But funny how things work: over there, they're investing in extreme sports and entertainment, while here, it seems they want our money to go into projects we don't even know will work. The big news is that the Senate has given the green light to the new Law for the Promotion of Investment in Strategic Infrastructure. And make no mistake – this is a big deal. It affects the pocket of every single one of us with an Afore.

The rumour that had everyone sweating

Alerts were flying thick and fast on WhatsApp and social media: "They're going to expropriate your Afore!", "The government is going to steal 30% of your retirement!". Sure, the law mentions that Afores can allocate up to 30% of their funds to these projects. If you hear that while waiting in line at the supermarket, yeah, it sounds like they're taking our money. But let's dial down the hysteria. The Mexican Association of Afores (Amafore) has already stepped in to clarify that this percentage isn't new. Consar had already updated the investment regime back in October 2024 to allow that cap on structured schemes. The new law doesn't change that limit, and most importantly: it's not compulsory.

Think of it like this: you've got some cash set aside at home to fix a water leak. The law says you can spend up to 30% of what you have in that envelope if you want. But if the repair costs a fortune and the plumber's a cowboy, you simply don't hire him. Same deal here. No Afore is going to put your money into a project that smells like a dud. Their fiduciary duty, their legal obligation, and their whole reason for existing is to protect your retirement. If they make bad investments, you're not the only one who loses; they lose credibility and customers.

So what's the point of this law then?

President Claudia Sheinbaum is pushing this law for one compelling reason: the current government is struggling with public investment. They need money for roads, energy, ports, and water. And who has the money? We do, the workers, sitting in the Afores. The idea is to create investment vehicles (so-called VPEs or CKDs) so that private money can go into public projects, but with clear rules.

The problem, and this is where the real debate lies, is transparency. One opposition senator hit the nail on the head a few days ago. She asked something that keeps me up at night: Who decides if a project is profitable? According to the fine print, the committees are defined by the government. That's like asking the fox to guard the henhouse. If the committees are packed with officials who need to sign off on the boss's pet project, who's going to put the brakes on?

• The spectre of losses: The senator gave some painful examples: the Mayan Train or the AIFA airport. No matter which side of politics you're on, the numbers don't lie. We're talking about millions in daily losses. If your Afore is forced (even if they say it's not, the political pressure is huge) to put money into a black hole like that, say goodbye to your returns.
• Government backing: If a project goes belly-up financially, the State pays up. With what money? More debt. This puts Mexico's credit rating at risk. If we lose investment grade, financially speaking, we're stuffed. Interest rates go through the roof, and we all end up paying more.
• Voluntary savings are key: In the middle of all this uncertainty, experts recommend not relying solely on your Afore. The current system (1997 Law) is going to give us a pension that'll barely be around 30% of our final salary if we do nothing. That's where PPRs (Personal Retirement Plans) come in. It's the only way to have real control.

Speaking of having control, while watching this political mess unfold, I remembered a setup I saw in Northern Virginia last year. They have a network of smart toll roads that not only eased traffic congestion but also generated huge capital gains for local pension funds. That's proof it can be done. I also think of the Forth Bridge in Scotland – a century-old engineering marvel that's still standing and turns a profit from tourism. Infrastructure can be an excellent business if it's planned well. The fear here isn't investment itself; it's the lack of professionalism and political overreach.

So, what do I do with my Afore?

Look, I'm going to be straight with you, like we're having a beer. They're not going to forcibly take your money. No 'coyotes' as the news calls them are going to come and rob your account. But there is a risk that, if we don't pay attention, the returns over the next few years will be rubbish because they pour money into vanity projects. As a colleague in the finance industry told me, 2025 was a historic year with capital gains of over a trillion pesos, but 2026 has already started with massive withdrawals due to unemployment and a more volatile market.

My advice, after a decade of watching this financial circus play out, is to educate yourself. Check your Afore's net return. If it's near the bottom, switch. It's free and it's your right. And if you can, even just a little, open a Personal Retirement Plan. The tax deduction comes back to you from the tax office the following year, and that money you do control: you can put it into variable income in the US or leave it in safe debt. Don't leave your future in the hands of politicians. Because while they're deciding whether your money goes to an empty airport or a refinery, they're probably off dreaming about a wakeboarding trip to Barcelona.