Autonomous Committee of the Fiscal Rule (CARF), highlights positive aspects of the pension reform and, at the same time, suggests some modifications.
Organized by the Seventh Commission of the Senate, the hearing on the pension reform was held, “Change for Old Age”, in which the Minister of Labor, Gloria Inés Ramírez, referred to the fiscal sustainability of the bill that is currently in progress in the Congress of the Republic. This act was attended by private pension funds, unions, social organizations, pensioner confederations, trade unions and the National Government.
“What we have done is model with the Ministry of Finance and we can say that until the year 2052 that our modeling goes, there is fiscal sustainability, we do not exceed the rule, the system is clearly financed, three minimum wages, less than three minimum wages would not be worth the penalty, because we would not strengthen the public system, which is one of the great objectives of this pension system”, said Minister Ramírez.
He highlighted what he called the benefits of the pillar system on which the pension reform project is based, including the solidarity pillar that will allow an income of $223,000 to be delivered to adults over 65 years of age and improve this value in accordance with the system country’s financial
“This project will guarantee the universalization of the right to a decent pension and for those who do not reach the pension, guarantee an income that guarantees them dignity in their old age and we will change two regimes that are in competition and that do not fulfill their function. A public system that today has six million affiliates and close to one million 700 thousand pensioners; and a private system through funds, which have 18 million members and 294 thousand pensioners, this means that the regimes did not meet their objective, which is to retire,” the official emphasized.
Pros and cons, according to CARF
For its part, the Autonomous Committee of the Fiscal Rule (CARF), in charge of monitoring the deficit and enforcing the law on efficient management of public finances, indicates that the pension reform project is positive in the following aspects: it eliminates arbitration that currently exists between pension schemes, decreases the subsidies for high pensions and broadens coverage. Additionally, it includes a solidarity component financed with the General Budget of the Nation, which, although it will increase future spending obligations and the inflexibility of public spending, generates a greater protection scheme for the elderly.
However, the CARF considers it of the utmost importance that, for reasons of fiscal sustainability, the following modifications be carried out: Reduce the threshold of the Colpensiones contributory pillar to 1 SMMLV; that 100% of the contributions that by virtue of the reform go from the individual savings regime to Colpensiones be saved; that it is not possible to use the resources of the Savings Fund to finance the semi-contributory pillar, beyond what is quoted by the beneficiaries, and that it is guaranteed that the Savings Fund is managed by professional managers, with adequate incentives to maximize the return of the investments.