Although it was speculated that President Gustavo Petro I was not going to attend the closing of the asofondos annual congress, because in the public agenda of the president, released by the Presidency since the morning of this Friday, April 28, the space was not included, the head of state arrived around 5:00 pm.
(See: The ‘buts’ of the study centers to the pension reform).
This edition of the Asofondos Congress, the association that brings together the four private pension funds in Colombia (Colfondos, Porvenir, Protección and Skandia), took place in a particular environment of pension reform.
The government project seeks to modify the current system, in which Colpensiones competes with private funds, to give way to a single pillar system, in which all contributions up to three minimum wages would go to Colpensiones and from this amount onwards they would go to private funds.
“The times of public debates and discussions have led us to dedicate more to the health reform than to the pension, and this means that the pension debate and even the labor debate have not had enough space within Colombian society, but in These spaces begin to accelerate that discussion, which on these issues will always be intense.Petro said.
The president assured that with the filing of the pension project, a couple of weeks ago, the debate stopped being governmental, and now it became legislative, but he also said that in this process he had several concerns.
(See: Private funds warn about the impact of the pension reform on savings).
“I voted against Law 100 in 1993, when I was 29 years old. When we went to the Davos forum, at the beginning of 2023, they talked about the ‘polycrisis’, the war, the growth of hunger and poverty, the climate crisis, the greatest crisis of the planet and humanity, and the economic crisis were brought together. . When the law that brought the Colombian pension system to life was presented in Congress, what we projected was a completely different world from the current reality”, he assured.
Petro assured that Today’s youth is much more sensitive to the crisis, and it is no more optimistic than in 1993, and for this reason, in part, a very high percentage of young people refuse to have children. “My children are going to live worse than I live, and my grandchildren are going to experience a drama that has no dimensions.”, pointed out the president.
“The projection is not as we did it in 1993. Is it worth maintaining the model that we created in the environment and the global context of 30 years ago? There was talk of universal coverage in pensions and health, that was the promise, but the assumption of the models was that the GDP should grow 5% per year, and that never happened. Law 100 failed”, questioned the first president.
(See: ‘If there is no stability, reforms that serve everyone have not been achieved’).
The president assured thatColpensiones is taking the market«yes to it is not ordered. “They are taking the ‘stock’ (savings), and Colpensiones, by taking the ‘stock’, makes it current, not savings, and with that it pays the pensioners that it has to pay at that moment, and this is a problem that is enlarging”.
Petro in Asofondos.
“The objective is no longer the one proposed in 1993 of universal coverage, it is savings, it is the thesis of the World Bank and the IMF, but savings in Colombia is this, the majority of Colombians are not putting their savings in, with great difficulty the salary is enough to pay a rent”, he added.
The president questioned to what extent the Individual Savings Regime (RAIS) has increased savings as expected. “I have all the income of the system, Colpensiones and RAIS added together, the income for 2021 is $37 billion, $12 billion from Colpensiones and $34 billion from RAIS, and in expenses for both it gives me $37.4 billion, two almost equal figures, the system it no longer works, it no longer works”.
(See: Pension reform: changes proposed by the O. Prosecutor of La Javeriana).
According to the president, when reviewing the portfolio figures, A good part of the investments are in private equity funds, They are financing foreign capital. “Private funds no longer finance the Nation. We are losing opportunities for national growth. This is the pension system”, he assured.
President Petro finally did a call to bring the ‘stock’ to the country.
“We are pleased that your government has presented a reform to the old age protection system, which we have requested from several governments”, he replied, for his part, Santiago Montenegro, president of Asofondos.
(See: Pension: the allowance for people with less than a thousand weeks of contributions).
Montenegro highlighted that the bill has several positive elements, such as unify a single system of the two mechanisms, the expansion of the solidarity pillar, for greater coverage of the elderly population below the poverty line, and also the elimination of subsidies to high pensions.
Montenegro and Petro in Asofondos.
“We are concerned that the proposed project as it is will not have the capacity to save, and on the contrary will decrease pension savings and also the macroeconomic savings that our companies need so much to invest and generate formal employmentMontenegro said.
In this sense, from Asofondos a series of elements were made to President Petro for the reform of the old age security system: “We agree with the scheme of the semi-contributory pillar, but we propose that it must start operating from the moment of the current retirement age. In this way, a parametric change is ruled out that, in addition to being very regressive, discriminates against women, who would have to wait eight years to enjoy this benefit, while men would wait only three.«.
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