Protección is a Colombian entity dedicated to the collection of parafiscal contributions and in turn is an administrator of pension funds, voluntary and compulsory, also since 1991 it collects labor severance pay.
Currently, there are two types of parafiscal contributions in Colombia, voluntary or independent and mandatory, which are those carried out by companies when they are linked to a formal job and correspond to 16% of the salary earned.
Recently, the fund collector Protección announced the launch of a program that allows users linked to their pension funds make voluntary contributionswhich are a type of external contribution to the statutory 16%. Making this additional contribution will increase the pension allowance and in this way to be able to receive a pension higher than the salary with which the monthly contributions are made.
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How do voluntary contributions to pension savings work?
If you are affiliated with a pension savings fund as an independent worker or as an employee, Protection -collector of parafiscal contributions- allows you to make an additional contribution to the mandatory payment which must be done monthly.
If you decide to make an additional contribution, this goes directly to your pension savings account. The fund manager has indicated on its website: «by making this type of voluntary contribution, people will be able to have a positive impact in tax terms.» besides, Those who make this type of contribution can request the withdrawal of these savings at the time they wishtaking into account that the company will retain 35% of the saved capital.
For people who are affiliated with a formal and stable job, the employee makes the 12% contribution corresponding to the salary earned and the employee makes the remaining 4% to complete the 16% of the salary, which is currently regulated by the national government. .
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It’s important to put attention on These voluntary contributions do not correspond to the 16% of the salary that must be paid month by month. This voluntarily comes out of the pocket of people who wish to increase the amount of their pension allowance.
People who make independent contributions are in charge of making contributions for the entire 16% corresponding to the salary with which they are making contributions.
The administrator of savings, pensions and severance recommends that once the person has started make voluntary contributions, it is advisable to save constantly so that this is reflected positively in the pension allowance.
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Why is it advisable to make voluntary contributions?
1. One of the main benefits of making this type of contribution is reduce the pension gap, which is the economic difference between the last salary and the value of the allowance, Protección ensures that: «with the exception of people who retire for a minimum wagenobody gets a pension allowance exactly for the value of their salary by contributing 16% of the salary each month during their working life”It also indicates: «the solution: the longer the voluntary contribution is made, the more this gap will be reduced.»
2. Improve the pension allowance: Reducing the pension gap implies that, despite the pension allowance has a higher value, Therefore, through the pension simulator, the approximate value of the allowance that will be received when obtaining the pension can be known.
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3. Early pension: Several pension savings funds such as Protección allow their affiliates to obtain their pension early by meeting the necessary capital, making voluntary contributions, helping to complete that value faster, and reducing the pension age of affiliates.
What will happen to pensions?
ALEJANDRA HERNANDEZ TORRES
DIGITAL SCOPE WRITING
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