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With the file of the bill that sought to enable an express transfer, for a time limit of six months, from the affiliates of the private pension funds to Colpensiones and vice versa, and that it was an initiative of parliamentary origin, there were several questions and concerns.
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How much did it cost to taxpayers?
The first alarm that pension funds and analysts indicated at the time lay in the multi-million dollar impacts it would have on public finances, calculated in 77.6 billion pesos, but also in the profitability of the affiliates’ resources, invested by the funds.
Is the door permanently closed to change the regime?
The collapse of this project does not affect the effect of several Supreme Court rulings that have allowed the return of contributors from the private regime to the public, but through lawsuits. The plaintiffs must show that they were not duly informed of the differences in the calculation of the allowance, when the time of the withdrawal arrived.
What would have been the effect of the project?
Thousands of Colombians have gone to court and, with conditions, their processes have gone ahead. Somehow, The major effect of the project that collapsed was to prevent the sponsors from having to go to a lawyer to return to Colpensiones.
What did the project allow?
The parliamentary proposal, filed as Bill 050 of 2019 of the House of Representatives and 322 of 2020 of the Senate, left the door open so that in a period of six months, once the law entered into force, who would have contributed at least 750 weeks for their pension (women over 47 years old and men over 52 years old), could change their pension scheme.
That is, it sought that those who are less than 10 years from retiring, and that they may have had counseling problems, but they can no longer be changed because the law so determines, they will change the pension scheme.
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Was there a difference between resources received and then paid by the State?
At the time, the Colombian Association of Pension and Severance Funds, Asofondos, indicated that although Colpensiones could have received about 42 billion pesos of the contributions Of some 518,000 affiliates who would have reached the public system, in the long term the cost would have been much higher for public finances, since the resources that would have come out of the treasury when it had to respond were estimated at 77.6 billion pesos for pensions, subsidies or the return of resources for those who do not reach retirement.
What subsidy would have gone to the favored?
If only the 113,000 affiliates to Colpensiones who benefited had passed, for the government the cost reached 64 billion pesos in subsidies, at a rate of 573 million per person.
In addition, in the discussion the Ministry of Finance said that although the initiative would have led to the cancellation of the issuance of pension bonds for 7.9 billion pesos, upon leaving towards private funds about 145,000 membersThis would have implied issuing bonds for 3.5 billion pesos.
How much did the accounts give to the people?
Asofondos calculated that of the 518,000 affiliates who could have gone to Colpensiones, only about 113,000 would benefit from that alternative, while 202,623 would not be able to retire in the public regime.
Was there a risk of bad decisions?
At the time, César Tamayo, dean of the Eafit Faculty of Economics, said that while the project seeks to amend the problem of the absence of double counseling, It could end up being detrimental to a group of people who might have a greater possibility of retiring, receiving a higher pension or a higher return of balances in the individual savings scheme with solidarity (Rais), that is, in private funds.
What part of the population benefited the most?
During the process of the legislative initiative, Fasecolda, the insurance industry union, stressed that 75 percent of the subsidies go to quintiles 4 and 5 of the population, in other words, those with the highest income, and the project did not attack this regressivity, but it aggravated it by allowing more people to go to the public system and receive a greater subsidy.
Was an impact on financial markets and profitability expected?
Another of the great problems that the initiative would have generated was related to the investments that the pension funds have, since when allocating the savings of the affiliates to seek profitability, before the transfer of resources to Hits (about 42 billion), they would have had to sell their assets, which would cause prices to fall, according to Francisco Azuero, a professor at the University of Los Andes.
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