Pension reform: these are the main points of the project – Sectors – Economy

Before the production unions and the labor unions, the Government presented yesterday, after several months, the draft of the pension reform with which it is intended to transition to a unified system that is mostly public, in which Colpensions have a greater weight.

If the project is approved, which will finally be filed on March 22, all people who will earn up to 3 minimum wages a month will have to start making mandatory contributions to Colpensiones, and the pension fund administrators (AFP) will receive contributions that exceed that amount.

(Read also: This is what the pension reform project brings)

With this, a person who today receives 7 minimum wages every month must have 3 of them in Colpensiones and the remaining 4 can be transferred to private funds, such as Future, Protection, Colfondos and Skandia. These two benefits would be combined or complemented to add a single old-age pension.

On the other hand, those who earn 3 minimum wages or less will not be able to choose where to put their pension savings, whether public or private. All of them will always have to be in Colpensiones.

(You may also be interested in: Do you have more than 1,000 weeks of contributions? The pension reform would not affect you)

It should be noted that today around 88.6 percent of private fund contributors earn between 1 and 3 minimum wages. Specifically, 40.2 percent receive a minimum wage; 39.1 percent, between one and two salaries, and 9.3 percent, between 2 and 3.

By transferring this group of contributors to Colpensiones, they are also indirectly forced to have to contribute for three more years, since while in the private regime 1,150 weeks are needed, in the public regime it is 1,300.

This is the so-called contributory pillar of the pension reform of the government of Gustavo Petro. Although at first the proposal was that all people who earn up to 4 minimum wages have to make a mandatory contribution to the average premium regime administered by Colpensiones, the ceiling was lowered as recommended by the experts.

For example, the proposal of Fiscal Observatory of the Javeriana University They discussed that the ideal would be that workers earning up to 2 minimum wages would probably be in a pillar managed by Colpensiones.

In total, the new Colombian pension system would be based on 4 pillars. Apart from the contributory, it would also be voluntary, so that those with incomes above can make additional contributions to the individual savings regime of private funds.

Less subsidies

Currently, it is estimated that 5 million people over the age of 65 do not receive a pension and only 1.7 million of them receive the subsidy of 86,000 pesos from Colombia Mayor, which exacerbates the problems of coverage and inequity. With the objective that no older adult is left unprotected in the country, two more pillars were devised: the solidarity and the semi-contributory.

The solidarity would be for all those over the age of 65 who are in a condition of extreme poverty, poverty and vulnerability, which they estimate to be 2.5 million people. The objective will be to give them an income above the poverty line, which is equivalent to 223,000 pesos, and which would be increased according to the growth of the country.

However, this is a lower amount than the one initially raised by the Government. The proposal was to give a basic income of half the current legal minimum wage, that is, about 580,000 pesos by 2023, to all people who did not manage to obtain a pension and their goal was to charge 3 million people.

At the time, it was established that this proposal could cost about 18 billion pesos a year. However, the Minister of Labor, Gloria Inés RamírezHe has not talked about what it would ultimately cost with these changes.

“We have made a judicious analysis showing not only the articulated that we have built, but also the technical studies that accompany it. The project will be filed on March 22 with the aim that we can improve it,” said the head of the labor portfolio yesterday.

It would also be the semi-contributory pillar, through which an income will be sought for people who cannot retire, but who have weeks in Colpensiones or savings in their individual account in a pension fund administrator.

This would apply to older adults over the age of 65 who have contributed between 150 and less than 1,000 weeks to the system and who are eligible for the solidarity pillar.

For this group of people, the benefit would consist of a life annuity that would be determined based on different values ​​such as the value of contributions.

There will be a transition regime

What the Minister of Labor did make clear is that in no case will the parameters to recognize the old-age pension, such as age and weeks, be changed, since it will seek to respect acquired rights.

The reform contemplates a transition regime Law 100 of 1993 would continue to be applied to people who, when the law came into effect, had 1,000 weeks of contributions. “We will have a transition period and no Colombian will have their rights taken away,” said Ramírez.

In addition to this, the project proposes creating a savings fund, which would seek to avoid any impact on the stock market and the acquisition of TES or public debt securities.

In this way, according to the bill, the money members have in their savings accounts would continue to be managed by the AFPs and would be used to recognize their pensions.

Women will have a 50-week bonus for each child

The project indicates that special conditions would be established for women, since they would be granted a reduction in the number of minimum weeks.

It would be 50 weeks for each child without exceeding the number of 3 children, that is, 150 weeks to compensate for care work.

Without the voice of the workers

One of the complaints in the discussion of the pension reform has been that neither the union that represents the private funds, Asofondos, nor the pensioner associations have been able to participate in the debate beyond attending on occasion as guests.

For example, at yesterday’s meeting in which the Government showed the draft, there were unions such as the Andi, Acopi or SAC and the workers’ unions such as the CUT.

About, Santiago Montenegro, president of Asofondos, He has repeated on several occasions that he believes that workers should have a voice in the discussion, including the informal, independent, and the 18 million pension fund owners.

* Porvenir, the pension fund administrator (AFP) is part of the business group that controls the company Casa Editorial EL TIEMPO.