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

Unlike what happened with the presentation of the National Development Plan and the health reform project, the filing of the pension initiative, ‘Change for old age’, before the Congress of the Republic, this Wednesday, was much more sober. It did not occur in the Parade of the House of Nariño but in the Constitution Room of the Senate, where the President Gustavo Petro He was accompanied by Gloria Inés Ramírez, Minister of Labor and other officials from his cabinet.

(Also read: The reform project will trigger the pension liability up to 249%, warned Anif)

Although the Ministry of Labor reported that, after the session of the Labor and Wage Policies Coordination Commission and the result of the tripartite dialogue, there was agreement on 86 of the 89 articles of the Pension Reform bill, the truth is that Among the points that generate the most controversy are the limit of three minimum wages to make mandatory contributions to Colpensions, and from there up, in private funds; the uncertainty about whether the flow of new contributions that Colpensiones will receive will be saved and invested or if there is a risk that it will be spent, and the transition that in the opinion of some is too short for workers who already have high expectations.

(You may also be interested in: ‘Pension reform hits savings and future allowances’: Anif)

In presenting this initiative, the president Gustavo Petro stressed that this is «a commitment to the well-being of the old men and women of Colombia, because it is a way of building peace in the country.»

He will also highlight the «social objective» pursued by the reform and mentioned that, if approved, a life annuity will be assigned to people who cannot retire, especially the old men and women of the country.

Among the objectives that the initiative also pursues are the closing of gender gaps, by proposing the reduction of almost one year for each child and with a maximum of 150 weeks, the coverage that the solidarity pillar will have since it would reach all those over 65 years in the country and will cover about 2.6 million people from the vulnerable population and the estimate of a life annuity for people who cannot retire, but who have weeks quoted in Colpensiones or savings in your individual account of an AFP.

hot topics

And it is that while the project proposes that in the Contributive Pillar those who earn between 1 and 3 minimum wages must contribute to Colpensiones and above that value in the Pension Fund Administrators (AFP), as Future, Protection, Colfondos and Skandia, For businessmen and some study centers, such as Anif, this ceiling is too high, so they propose that it be only one or a maximum of 1.5 minimum wages.

It even indicates that if in the discussions of the project it is accepted that this ceiling would be reduced to a minimum wage, the pension debt would be reduced from 130.7 percent of the gross domestic product (GDP) in present value, which is what it would cost today. with the cap at 3 monthly minimum wages, at only 52.6 percent of GDP, according to preliminary calculations.

(Continue reading also: Pensions: age and that the Government does not comply, the main fears of Colombians)

From the Me too, union of businessmen in the country, also warn about another negative effect of leaving that ceiling at 3 salaries.

«This reduces the dynamism of the capital market, especially in the purchase of public debt titles TES», points out from the union, while emphasizing that, through the capital market, financing is accessed for infrastructure projects, both of the public and private sectors (First line of the Bogotá metro, the Aburra Tunnel, TransMilenio and the National Development Bank (FDN), among others).

something that matches Juan Carlos Mora, President of Bancolombiawho considers that «the capital market is the blood that generates a dynamic in which projects are funded, especially long-term ones, and pension funds are the main players in that market.»

In this sense, he says that: «If we want to advance in development, we have to have a strengthened capital market and that is a fundamental aspect of the (pension) reform.»

savings and transition

Another topic that will focus attention in the discussions that will begin around the pension reform it has to do with the savings that this initiative should generate, which for some analysts, will not be much as it is conceived.

Entrepreneurs, for example, are concerned about the distribution of the resources of the Savings Fund of the contributory pillar as described in the project filed this Wednesday

(In addition: The pension reform project is already in the hands of the Congress of the Republic)

For Andi, what was established in the project was not what was agreed upon. The tripartite agreement, they warn in the business union, focused on defining it by percentages of the new resources that enter and not by percentage of GDP. In this sense, the resources allocated to savings may vary according to fluctuations in GDP.

For the Anif study center, it is important that the Government give clarity regarding the management of the resources of this fund, that as it is in the project it will be able to invest deliberately and the possibility should be opened that, once the project, the Executive may establish the other criteria for it.

The third issue that will undoubtedly have a broad debate among legislators has to do with the transition, that is, the time that people who are close to obtaining their pension will have.

The project establishes that said transition regime should begin in 1,000 weeks. In fact, the labor unions say that this should be 750 weeks.

For Anif, this possibility of transfers would generate an additional cost due to the people who can move, equivalent to 1.1 billion pesos the first year after they have made the transfer, which over the years would rise to 210 billion pesos. pesos

María Claudia Lacouture, President of the Colombian American Chamber of Commerce, AmCham Colombia, He said that the legislative package filed by the Government must be based on the tools for labor formalization and improve the conditions of workers today and for their retirement without affecting the business fabric.

In this sense, he said that the discussion must have all the guarantees to save the savings of millions of Colombians in the face of uncertainty about the destination of the resources for old age and shield with guarantees that those managed by the public system are destined for pensions responding contribution made by workers in their working life and support for the vulnerable older population and not with other short-term tax fines.

The businessmen also called attention to the fact that the fiscal cost of this initiative was not presented at the negotiation table, how much it will cost public finances in its entirety, while warning thatand “there is no clarity, nor was an analysis presented on the magnitude of the pension liability.

*Porvenir, pension fund administrator (AFP) is part of the business group to which Casa Editorial EL TIEMPO belongs.

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