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Since it was difficult for me to understand the debate on pension reform, I help my readers by summarizing what I understood.
In the case of pensions, the failure of the system is in the failure to meet the objective (less than 1 in 4 Colombians receives a pension), and in the fact that large pensions are subsidized with State contributions. The demographic pyramid means that the inevitable trend is to need more and more funds to provide for old age and that the proportion of young people to do so is decreasing. There is no design to answer this nor how to ‘build on what is built’.
But the opposition is not to the reforms but to the Government. Any argument is valid then for that objective.
The false arguments
What is the program of a guerrilla; which is what happened in Venezuela; which is ‘communism’. These are unsupported presentations or exaggerations, which are self-justifying by their own definition (if the ‘left’ is ‘bad’, what the left proposes is bad); The lack of analytical or argumentative support to defend this position (generally based on ignorance about the topic in question) leads to the final argument being: “Petro is a danger: he is a bad person.”
The essence of the proposed reform
That every person should have support in their old age. The source for this must be the contribution of those who have work (in Colombia this is already a privilege) and subsidies from the State.
The mechanics are that those who do not have labor income (for example and mainly housewives) receive a fixed minimum sum (already agreed upon at $230,000); Those who earn up to a certain income (for now up to 2.3 minimum wages) make their contribution to the state entity Colpensiones; Those who exceed that income can invest the surplus in an APS (private pension fund that is in practice a savings account).
Issues of controversy or conciliation
The central theme (almost the only one) of the considerations presented against the reform are doubts about the sustainability of the system that is created.
To oppose, proposals come out without proof or without an answer: the State (Colpensiones) is not capable of managing so many pensioners; How much will be required or how long the funds will last before making a new reform; What if the Court will declare an unconstitutionality? How will it be defined how or where these resources can be invested?
On the underlying point of resource management, the debate was ‘neutralized’ by agreeing that it will not be done by the government or the private sector but by the Bank of the Republic.
Regarding the impact of the amount of the minimum wage (SM) that would be the basis for mandatory contributions to Colpensiones, its consequences are:
1 If it is increased (the president proposes 4 SMs) only 611,200 contributors would remain in the private funds; That is to say, the system is nationalized since more than 90% of the pensions would be managed by the State. 2 As obligations increase, the pension liability for the government increases and the resources assigned to the fund last less (the same as with the decrease in the number of weeks to contribute). 3 By proportionally subsidizing all those covered in this way, the purpose of comparatively improving the most vulnerable (those with the least pension) is not achieved.
Comparison with the health debate
In the health case, failure to provide the service was not involved. The coverage was quite high (over 90%) and relatively passable. Therefore, the IPS, which are the operators, were not touched (because it was mostly private, the service itself was not privatized) and what was questioned was the insurance system because it was not satisfactory: partly because it was in a structural crisis (of 117 EPS nearly 100 had gone bankrupt) and partly because it was considered that part of the crisis was due to the fact that the EPS in practice were basically financial intermediaries (‘health was a business not a right’) that represented an extra cost for the system. The basic problem was, in any case, the capitation sum (which the State is obligated to or can allocate to care per patient) which will never be enough to satisfy all the needs. And the crux of the debate, the centralization of resource management in the state institution, the ADRES. Everything was so clear that the EPSs (Acemi) had already agreed and requested to become ‘managers’ before they sank the reform and considered that a victory.
In both cases (both for the financial crisis of the health system and for the structural deficiency of the pension system) what underlies the confrontation is the different ideology between those who assume that because it is a responsibility of the State, it must assume it; and those who consider that the private sector is more efficient and that is why that responsibility should be delegated to it.
From the same author: Major, old or elderly
