Intention to increase the threshold in pension, what is Petro’s game?

While speaking this week Petro announced that he will propose to the House to increase the contribution in Colpensiones from 2.3 to 4 minimum wages.

“In Colombia, only 1 in 4 people reaches the age at which they are entitled to a fair pension. 1 in 8 women retires. (…) Colombia is the second country with the highest elderly inequality in Latin America, surpassed only by Haiti,” the head of state said.

He then explained the four thresholds that make up his controversial pension reform.
The first pillar, he said, will benefit two and a half million grandparents “who never contributed or had their contributions stolen and who are now over 65 years old. (…) It is the possibility of giving them a retirement income of 232,000 pesos per month. This first pillar, for example, is for those who worked at home as a housewife and never contributed.”

The second pillar, he added, is to benefit those who have contributed much of their lives but are not enough to receive a pension.

To those who worked independently day and night, with a low income and failed to contribute the minimum number of weeks: “For them we will receive a retirement income, consisting of the savings they have had in Colpensiones, and a subsidy which is given by the Status of up to 30% at the time you reach your retirement age. This second pillar is for the taxi driver, the merchant, the street vendor, the farmer, the street artist.”

The third pillar, he explained, is for those who contribute between one and a maximum of 2.3 minimum monthly salaries, who will be in Colpensiones: “I plan to increase it to four minimum salaries if the Chamber accompanies me, and therefore, they will be guaranteed the right to pension, depending on the weeks they have contributed and their age.”

And the fourth pillar, he concluded, is for those who can contribute above the 2.3 minimum wages: “I will propose four minimum wages to the House, and beyond. They will contribute a maximum of 2.3 minimum wages or 4 to Colpensiones, but they will be guaranteed that they can pay the surpluses to the private pension fund of their choice, based on their income level.”

In response, former President Álvaro Uribe published a letter criticizing the first pillar: in order to “protect another 2.5 million elderly people, it is necessary that the national budget meets its social obligations, but the current system should not destroy. “of pensions.”

Regarding the second pillar, he said that “it is not new, as the Periodic Economic Payment System (BEPS) has been in place since 2005, which meets that social purpose.”

Regarding the third pillar, the natural leader of the Democratic Center assured that the lower-income Colombians who remain there will not have the opportunity to see a return on their income and grow as in the private sector, nor will they have the freedom to choose.

And he warns that in the fourth pillar “with a threshold of 2.3 minimum wages, the state would collect between 74% and 79% of pension savings; With the three minimum wage threshold, the original proposal, the state would keep 80% or 83%; and with the new four minimum wage threshold proposal, the state would capture between 85% and 88% of those savings.”

Due to the controversy between these reasons, and also due to the failure to fulfill the agreement with the Liberals and La U, the procedure in the House for the pension reform may become complicated.

Source: El Heraldo