It is expected that this year the Government will present several of the reforms with which it is intended to carry out the road map of President Gustavo Petro. In addition to labor, health and justice, one of the ones that most generates expectations is the pension reform.

In the last few hours, a discussion on the pension issue broke out again. This time due to the statements made by Minister José Antonio Ocampo to the regional media, in which he assured, regarding the possibility of increasing the retirement age in Colombia: “This is an issue that we will discuss and we will reach a point of view of the government. The issue is at the negotiating table,” said the head of the portfolio.

With this statement, the minister made it clear that for now he will not issue any opinion regarding how much this age should rise, since the government of Gustavo Petro does not yet have a unified position on this issue.

Priority issue

In addition, Minister Ocampo did not give an exact date for the presentation of the reform, but he maintained that this is an urgent issue on which he is already working together with the teams of the portfolios of Labor and Planning, “to see if we begin to reach the specific parameters of the reforms based on the agreement. Many dialogue tables have been held and proposals have also emerged from there,” said Ocampo.

Although there is nothing concrete or defined in the minister’s statements, the debate took place because the possibility of increasing the retirement age was opened, which generated mixed reactions. Before the debate over the statements of the head of the portfolio, President Gustavo Petro published on his Twitter account: “First I resign before raising the pension age.”

On the other hand, Bruce Mac Master, president of ANDI, maintained that “on pensions, perhaps the most convenient thing is to raise a discussion that consults the opinion and decision of each one of the contributing citizens of the system. An eventual obligation to transfer resources to the public system may go against individual will”.

“Perhaps we should concentrate more on giving much more information to each contributor, to each worker, so that he himself decides where he wants his resources to be investedadded MacMaster.

On the other hand, from the Administrative Department of the Presidency of the Republic (Dapre), the national government announced that it does not plan to increase the pension age in the pension reform.

This was clarified by Mauricio Lizcano, director of Dapre, through his Twitter account: “The government does not plan to increase the pension age in the pension reform.”

asofondos

The issue of raising the age to be able to retire is not new. In fact, the president of Asofondos, Santiago Montenegro, referred to the implications of population aging on pension systems.

He explained that “The drastic demographic transition reduces financing resources and increases the costs of a growing number of pensioners and, therefore, pure pay-as-you-go systems (such as the one that Colpensiones currently manages) are forced to reduce benefits.” This will imply raising the pension age, reducing the maximum pension and increasing the contributions or the amount of contributions, as has been seen in other countries

Montenegro maintained that around 1950 there were more than 11 active workers for every adult over 65 years of age; Today there are only four. By mid-century there will be only two, and by the end of the 21st century there will be only one. The most serious thing is that, due to informality, today there are only two formal workers for each older adult. And what makes delivery systems even more unsustainable is that this figure will continue to decline due to the processes of robotization and digitization of society.

Montenegro specified that, although savings systems are also affected by aging, in these the money grows over time, “allowing the reduction in benefits to be significantly less.”

finally concluded that “the only way is to take care of and grow savings so that more and better pensions can be paid”, as is happening in many countries around the world, including the Netherlands and China.

pillar system

It should be remembered that the Head of State has insisted that the new pension system would be based on a pillar system and that it would have a public fund as its core.

“Wanting to reform it implies, and that is the proposal we have made, a regime of pillars. We said that the contribution of the worker and his employer go in part to a large fund, in the first pillar, public, of simple distribution, which guarantees a pension at least to the contributor; that is, I am talking about 20%. And from then on, depending on the high salaries, what percentage of the Colombian population has high salaries, they have the freedom after contributing in the first pillar, in free and private second pillars”, Petro stated.

so it is in Latin America

In Colombia, the pension age is currently 57 years for women and 62 for men. It is worth mentioning that life expectancy is 74 years and women live, on average, 6.8 years longer than men.

In other countries in the region, such as Venezuela and Uruguay, the retirement age is 60 for men and 55 for women. While in Paraguay men and women retire at the same age, 60 years. In Argentina men retire at 65 and women at 60, the same ages as in Brazil.

Currently in France there is a great controversy, because the government of Emmanuel Macron aspires to raise it from 62 to 64 years, arguing that life expectancy is already 85.5 years for women and 79.4 for men.

Likewise, Spaniards who want to retire with 100% of the pension will have to be at least 66 years and four months old, by virtue of the 2013 pension reform, in which the retirement age was progressively raised from 65 at age 67, in a total horizon of 15 years.

These 66 years and four months will be the age required for those who prove less than 37 years and nine months of contributions (this year 66 years and two months are required to retire with less than 37 years and six months of contributions).

If they exceed 37 years and nine months of contributions, workers who want to retire from January 1, 2023 with 100% of the pension will have to be 65 years old.

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