In Colombia, it is common for many workers to begin withdrawing their severance pay as soon as it is received, without analyzing that a good investment of these resources can guarantee a better future for them and their families.
For Juan Carlos Díaz, head of Recruitment and Payroll at the Universidad del Rosario, “in the current economic panorama, the intelligent management of severance pay is presented as a crucial strategy for long-term financial well-being.” The expert advises avoiding impulsive spending of these reserves and instead adopting a conscious savings approach.
Díaz assures that in a constantly changing economic environment, making informed decisions is the key to optimizing the potential of layoffs and building a solid financial future. For this, there must be pedagogy and knowledge about what severance pay is, when they are paid and who is entitled to it.
How to invest severance pay intelligently
Severance pay is a social benefit that employers must pay to workers in addition to their salary. The amount corresponds to a salary for each year worked by the employee or fraction of time and does not apply to employees whose remuneration is stipulated by full salary.
They are settled annually on December 31 and deposited in a severance fund before February 14 of the following year. Each employee voluntarily chooses the severance fund and as a member is the owner of an individual account.
Based on the importance of this social benefit as a basis for the savings of each worker, they are advised to take into account investments and savings practices. For example, severance payments can be used to purchase a home or improve your home, as well as to pay for higher education and that of your family group.
“It is of great importance to allocate these monies towards the objectives for which they were created, to be aware that a good investment of your severance pay is to take advantage of a better future,” said Díaz.
Home purchase or improvement
According to the expert from the Universidad del Rosario, an intelligent way to invest severance payments is for the acquisition of housing, construction of housing or rental improvements, release of mortgage liens and payment of property tax.
To purchase a home, the promise of sale and the certificate of freedom and tradition of no more than 90 days must be attached.
In the case of housing construction or local improvements, the person must attach the construction contract and the certificate of freedom and tradition where the employee appears as the owner of the property.
To release the mortgage lien, the certificate from the financial institution and the certificate of freedom and tradition must be attached where the employee appears as the owner of the property.
Finally, to pay property tax, it is necessary to present the tax settlement receipt and the certificate of freedom and tradition where the employee appears as the owner.
Layoffs can also be an educational aid to meet professional goals in the short or long term. Juan Carlos Díaz explains that if they are partial layoffs for higher and technical studies, it is possible to rely on them. To do this, the registration payment receipt must be presented. This benefit covers the employee, his or her spouse, permanent partner, sons or daughters.
Severance interest
In addition to severance pay, workers have the right to payment of interest on severance pay.
The head of Recruitment and Payroll at the Universidad del Rosario explains that these “correspond to the payment of interest on severance pay and is equivalent to 12% annually of their total value or proportional to the time worked, for those workers who do not complete one year complete work, according to the law, interest on severance pay must be paid on January 31 or before that date of each year.”
However, in the event that there is a termination of the employment contract prior to the end of the year, the interest must be paid proportionally to the working time, the expert assured.
For experts, it is important to avoid impulsive spending of these reserves and instead adopt a conscious savings approach.
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