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In a new pension reform initiative, it seeks to transfer Fonpet resources to expand pension coverage and an early pension with which the beneficiaries continue to contribute to the system.
The first term of the 2020-2021 legislature ends with a pension reform based in the House of Representatives. The author of the initiative is the representative Jhon Jairo Berrío López, from the Democratic Center, but he is accompanied by several members of the Uribe party in that corporation, such as Margarita Restrepo, Jairo Cristancho and Óscar Villamizar, and proposes, in a general way, three major changes in the Colombian pension system.
First, the representative raises a possible solution for people who meet the pension age, but do not have the resources to finance it. “The need arises to create or allocate national resources, such as those provided in the National Pension Fund of Territorial Entities (Fonpet), to address the dilemma of pension coverage in Colombia “says the explanatory memorandum of the project.
In this sense, the first article is written, stating that the Fonpet national resources received by municipalities with coverage greater than 125% of their pension liabilities are 50% destined to the Pension Solidarity Fund to meet the early pension model that the project also includes.
The remaining 50% of this surplus, according to the project, would be divided into two parts: “25% for the strengthening of the health sector and the remaining 25% to finance the program to strengthen coverage and insurance of Colombian old age (BEPS) ”. Now, the paragraph of that article contains the warning that when the pension liability is covered with the resources of the Fonpet, corresponding to the health sector, the municipalities and departments must allocate them to fiscal and financial consolidation programs of the State social enterprises (ESE) of the respective jurisdiction.
Advance old-age pension
The second major proposal of the reform based on the creation of an early pension model that can only be accessed by people who have the minimum pension age who have not reached the number of weeks required by law, that show the impossibility of continuing to contribute to the system and that have gathered a minimum of 900. This anticipated pension will be a current monthly minimum wage.
Now, as stated in the paragraph of that article, those who achieve the announced requirements for the early old-age pension must authorize Colpensiones and private funds, “expressly and irrevocably (…) to deduct the pension contribution from the pension allowance, that is, 16% and 8% of the health contribution in 2021 and 4% as of 2022, until covering the total of 1,300 weeks that are required to acquire the pension right ”that the legislation requires in article 33 of Law 100 of 1993. According to the second paragraph, this anticipated old-age pension would be in force for 10 years from the effective date of the law.
“It is proposed to transfer 50% of the surpluses of the“ general purpose ”sector of Fonpet to the Pension Solidarity Fund, in order to finance the recognition of pensions for people who earn two SMMLV or less and who, having reached the ages of 57 years in women and 62 in men, they have not met the number of weeks required by law, as long as they have credited at least 900 weeks effectively contributed to the Average Premium Scheme or the Individual Savings Scheme with Pension Solidarity ”, says the representative Berrio.
Next, the project proposes benefits for people at levels 1, 2 and 3 of the Sisbén that they demonstrate in the last three years, through a mechanism defined by the National Government for the verification of the information, have been unemployed or in the development of informal commercial activity that does not allow them to contribute 100% of the mandatory minimum established in the General Pension System.
“The National Government, through the Pension Solidarity Fund, will finance 50% of the pension contribution,” says Article 4 of the reform bill. He adds that the remaining 50% will be provided by the citizen “who has been accepted into the program to strengthen coverage and assurance of Colombian old age administered by Colpensiones.”
Lastly, the initiative would have resources from Fonpet to strengthen the Pension Solidarity Fund Program, which would replace the Periodic Economic Benefits (BEPS), created in article 87 of Law 1328 of 2009. With these resources, Fonpet would finance “A subsidy of 50% of the contribution so that Colombians affiliated there receive a pension equivalent to one SMMLV.” In numbers, the reform proposal estimates that 1’447.049 new pensions would be generated in the 10 years of validity “A figure that is close to the number of pensioners currently in the General Pension System.”
