As the cinema is evaluated, it is worth decomposing what was discussed to date regarding the pension reform into the same categories, perhaps to encourage the Representatives to correct what was wrong and avoid a reform that ends up being a burden for young people in the medium term, for the benefit of the generations that will retire in the next twenty years. The same thing so that we do not end up with a reform that is fiscally unsustainable in the long term or where, even worse, pension savings end up being trapped by politicking. Everything with a principle of action, Colombia does need a pension reform, but a good one!!
Among the good things about the project is reaching 3 million older adults with a solidarity pension model, although it is a pity that this could have been achieved from day two of government, with the fiscal resources it has had, if it had been a priority. That did not need pension reform. It is also good to have achieved a model that avoids unhealthy competition in the contributory regime between AFPs and Colpensiones. It is also positive to end high pensions and have partly put an end to that reverse “Robin Hood” model where the poor end up subsidizing the rich. There was a lack of courage to mess with the special regimes that deserve adjustments.
One of the bad things about the project in question is the change in the semi-contributory regime, which, unlike the current one, does not motivate savings and on the contrary prevents everything that the majority puts into pension savings from becoming a positive balance if fails to meet requirements. Now it will be money from the State that it will return in tiny installments of less than 200 thousand pesos per month and that in a few contributions made it does not return interest. It also seems bad to me that, given the high threshold, we force the change from the individual savings regime to the average premium, where everything that workers put into their pension monthly stops being their personal savings and becomes a kind of tax .
And finally in the ugly category, the bill ends the freedom to decide who you want to manage your savings (whether an AFP or the State). It is also ugly that in 2065 or before pension savings will end and that the State ends up generating an increase in pension liabilities to 76% of GDP, but it is more irresponsible to be told to calm down and then someone will make another pension or tax reform to solve that mismatch.
Poor young people today who will be the “paganini” of the problem. And although it is good that the Central Bank is the one that manages the public pension fund, it is ugly that we are affecting long-term savings and credit by reducing the financing of investments that Colombia will need.
But the ugliest thing could be that after this reform is approved, the labor reform comes out, which is today a true “anti-pension reform”, because it multiplies unemployment and informality, which are the worst way to motivate a decent pension.
A lot of work to refine in the House of Representatives!
*EIA University Rector
*Former Minister of State
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