The National Government is filing this Wednesday a reform that guarantees a basic retirement income for 2.5 million adults over 65 years of age without the possibility of a pension and implements in Colombia a system of pillars to make the pension system more equitable and expands its coverage .
The Minister of Labor, Gloria Inés Ramírez, described this initiative as a qualitative change. In other words, it goes from a regime that is in competition and parallel to a unified regime. This is going to guarantee that, unlike what happens today when, for every four older adults, only one receives a pension, this right is effectively extended to many more Colombian men and women.
pillar system
The solidarity pillar will apply to all those over 65 in the country, it will cover 2,596,098 people who correspond to the vulnerable population (up to level C3 of Sisben). This population will be granted an income equivalent to $223,800, equivalent to the extreme poverty threshold projected for 2024.
The semi-contributory pillar will assign a life annuity to people who could not retire, but who have weeks listed in Colpensiones or savings in their individual account of a Pension Fund Administrator (AFP). To receive, the project establishes that the beneficiary must be over 65 years of age, have contributed a minimum of 150 and a maximum of 999 weeks.
The people in this group, who are also up to level C3 of Sisben, will also receive the value of the solidarity pillar.
In the contributory pillar, all the people affiliated to the system will be as follows: Colpensiones will receive contributions up to three minimum wages and the AFPs, the contributions that exceed 3 minimum wages. These two benefits will be combined or complemented to add a single old-age pension.
The parameters to recognize the old-age pension, such as age, weeks, and replacement rate, are maintained.
Those who have the capacity to contribute through voluntary savings may invest their resources without any restriction to obtain a better pension.
Also read: Government filed labor reform bill
savings fund
It consists of 20% of the total contributions to the contribution system that Colpensiones will receive will go to a savings fund that will increase that percentage progressively every 10 years. The creation of this system will avoid impacts on the stock market and the acquisition of Treasury Securities (TES).
These resources will only be used when the nation’s spending in the semi-contributory and contributory pillars exceeds 1% of the GDP (Gross Domestic Product) of the respective year.
Closing gender gaps
The project is committed to being a pioneer in closing gender gaps, since it proposes a reduction of almost one year for each child and with a maximum of 150 weeks, to compensate for care work and guaranteeing that women retire with a fair pension.
Keep in mind:
• Disability and survivor pensions remain the same, with the same requirements, but now they will be recognized by Colpensiones.
• Acquired rights will be respected, which means that pensioners maintain the same conditions.
• A 2-year term is established so that people who, even if they have less than 10 years left to retire and have 1,000 weeks or more of contributions, can transfer to the regime that best suits them in accordance with the provisions of Law 100 of 1993, once they have received double counselling.
Source: Presidency of the Republic