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LATIN AMERICA ADVISOR

Financial AMERICA ADVISOR

A daily publication Of the dialogue

May 7, 2024

Will New Reforms Benefit Colombia’s Pension Recipients?

Colombia’s Senate in April approved and sent to the lower house President Gustavo Petro’s legislation for pension system reforms. // File Photo: Facebook Page of Gustavo Petro.

Q

  • Colombia’s Senate on April 23 approved President Gustavo Petro’s pension reform plan, an overhaul that would make the government the manager of approximately 70 percent of workers’ pension contributions, with private pension funds managing the rest. If the lower house approves the reform, it would go into effect in July of next year. What are the most important parts of the pension reform? To what extent would it improve Colombia’s current pension system? What are the biggest changes that pensioners and private pension managers would see under the reforms?

A

José Ignacio López, president of ANIF in Bogotá: “The reform addresses several issues within the current pension system by eliminating arbitrage between the public and private schemes and by reducing subsidies for higher-income pensioners. However, given the parameters approved in the Senate, it establishes a pay-as-you-go pillar that will include 80 percent of workers, which would create additional fiscal pressures in the medium term and a reduction in private savings. It is unlikely that significant improvements will be made to the current proposal in the lower house. Ideally, the threshold for contributions limiting the public pillar of the system should be…”

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Complete editions of the Financial Services Services Advisor are delivered on a biweekly basis to members of the Dialogue’s Corporate Program and other subscribers. Sign up below for a free complimentary preview subscription.

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ABOUT THE financial services ADVISOR

Covering Latin America’s banking and insurance sectors, remittances trends and data, micro lending issues, new technologies in the industry, anti-money laundering regulations, and much more, the Inter-American Dialogue’s biweekly Financial Services Advisor, a sister publication of the Latin America Advisor, gives readers fresh insight and diverse viewpoints from financial sector leaders. To subscribe or for more information, contact Gene Kuleta, editor of the Advisor, at gkuleta@thedialogue.org.

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Staff

Gene Kuleta
Editor
P. 202.463.2920
E. gkuleta@thedialogue.org

Carl David
Goette-Luciak
Reporter

Nili Blanck
Reporter

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board of advisors

Ernesto Armenteros
Vice Chairman
of the Board,
Banco de Ahorro y Credito Union

Jimena Blanco
Chief Analyst,
Verisk Maplecroft

Richard Child
CEO,
Mattrix Group

Michael Diaz
Partner,
Diaz, Reus & Targ, LLP

Ernesto Fernández Holmann
Chairman of the Board,
Ayucus

Desiree Green
Vice President,
Int’l Gov’t Affairs,
Prudential Financial

Earl Jarrett
Deputy Chairman & CEO
The Jamaica National Group

Barbara Kotschwar
Professor of Political Economy,
Georgetown University

Thomas Morante
Attorney,
Carlton Fields

Manuel Orozco
Senior Fellow,
Inter-American Dialogue

Adalberto Palma Gómez
Senior Partner,
Aperture SC

Rodolfo Pittaluga
Adjunct Professor,
Florida International University
College of Law

Roberto Teixeira da Costa
Founder & Board Member Emeritus, CEBRI

Mario Trujillo
CEO,
DolEx Dollar Express

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