The pension reform project of the Government of Gustavo Petro advances in the Congress of the Republic. It has already been approved by the Senate and now must undergo two new debates in the House of Representatives. These must be given before June 20, the date on which the legislative period ends and, if not done, it will sink, as happened with other bills.
Despite its approval, there are many criticisms about it, mainly because with this, among other things, the freedom to choose where to contribute to retire is lost or because the threshold for contributing to Colpensiones has a new proposal from the President Gustavo Petro, which leaves behind what was agreed in the debates.
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The truth is If the Chamber approves this, there will be many difficulties that Colombians will have in the future.. This was hinted at by former Finance Minister José Manuel Restrepo, rector of the EIA University, through a video on TikTok.
In this, the former official and academic announced the six cursed legacies that the pension reform would leave for the country, especially for young people, if approved as is. They are the following:
Restrepo stated that young people would assume a gigantic burden if this pension reform is approved as it is at this moment.
Based on an analysis by former investigative member of the Bank of the Republic Rodrigo Suescún, the former vice minister of Finance specified that The savings would end up running out in 2045 and if no parameter is changed, the harsh reality is that Young people are going to have to contribute a greater proportion of their salary, or companies the same, to cover pensions.
“To give you an idea, according to Suescun, this would mean going from the 16% that is contributed towards the pension today, of which 12% is contributed by the employer and 4% is contributed by the worker, to 37%. The project does not say this, but it would obviously be generated by the project if the parameters were not modified,” Restrepo said.
He pointed out that this is the cost that this would have and, therefore, it would be an unpayable inheritance for young people, a significant cost for youth.
According to José Manuel Restrepo, the problem is that an increase in the pension liability would be generated, but this depletion of resources in 2045 would end up leading to the fact that if young people do not increase the burden of paying these pensions, they would end up contributing it to themselves. to the Government and that would mean something like an additional $87 billion from 2023 per yearsomething like five tax reforms that someone, in this case the youth, would have to pay for.
Therefore, he insisted, this would generate a burden of intergenerational inequality, where young people would end up paying more taxes or paying more pensions, while those who today approve this norm, or those who are ad portas If they receive a pension, they would benefit from the burden that young people would have to assume, which means that they are two potentially very dangerous inheritances.
The academic explained that what it means by nationalization is that, practically, with 2.3 minimum wages as the transition threshold from the individual savings regime to the average premium or with the four proposed by President Gustavo Petro, in any case, Actually, the AFPs (private funds) would tend to disappear due to starvation, simply because they would no longer end up managing a large amount of resources other than those they serve today.but once these people retire, their role practically disappears.
As an example, José Manuel Restrepo stated that the fourth inheritance is that the freedom to choose a pension fund freely ends. He notes that You prefer that your pension be administered by someone who has more professionalism, more experience, who has demonstrated profitability generation with the resources that are your own, from your savings.
In that order of ideas, he argued that this freedom disappears because a good part of the resources would end up being administered by the average premium regime, headed by a State entity, regardless, even, of the professionalism or not of that State entity.
The former Minister of Finance said that the fifth inheritance is article 94 that they introduced at the last minute, among others, because there were two votes missing to have majorities in the Senate. According to him, It is a legacy to create differential treatment for ethnic populations and peasant groupswhich in other words means benefiting 41% of the population with a totally different pension system, among others, going back to what exists today, even without recognizing the demographic transition that the nation and the world are in.
He cited that this was warned by the president of Anif, José Ignacio López, who showed the concern that would arise from this inheritance.
The rector of the EIA University criticized that this labor reform that destroys employment and generates more informality then becomes a kind of anti-pension reform, that is, it is the complete opposite of what would be approved with the pension, because what What is needed for there to be a pension, at least, is that there is work and that there is labor formality.
“That is destroyed with this labor reform proposal,” he claimed.
Thus, he emphasized that several elements must be included in the debate in the House of Representatives. They are the following:
- First: put an end to the problem of article 94, because it is a very big fiscal risk. It is a disorder because the way it was introduced lacks rigor, there is not even a fiscal evaluation of the impact that this may have.
- Second: the House of Representatives has to take the “challenge” and they have to reflect on the parameters of funds, make some modification of parameters in age, in replacement rate, in base liquidation income in percentage of contribution, to avoid that this pension reform needs another pension reform later, “That is irresponsible. One does not launch a pension reform proposal knowing that later you need another one, because this one is unsustainable. It is an irresponsibility that we are passing on to the following generations and that should not happen. The House must be responsible”, he warned.
- Third: we must lower the threshold for the transition from individual savings resources to the average premium, from 2.3, which is currently in the proposal, and never reach 4 because it is absurd, and try to leave it at 1.2 or 1.3 minimum wage.
Finally, he pointed out that we must be very aware that if this pension reform were to be approved, What cannot happen is that a labor reform like the one in question is approved later, because it ends up being the destruction of what had been done by hand, but doing it with the elbow, which would be with this labor reform.
