Scoop has an Ethical Paywall
License needed for work use Register



Cablegate: Details of Pension Reform Legislation

This record is a partial extract of the original cable. The full text of the original cable is not available.



E.O. 12958: N/A
SUBJECT: Details of Pension Reform Legislation

1. Background: Approximately 6.1 million Colombians receive
some sort of public pension assistance. In 2003 COP 5.6
trillion (USD 2.4 billion) went towards the public pension
system. In 2004 the number increased to COP 6.7 trillion
(USD 2.9 billion). However, while GOC is forced to allocate
more money to the public pension system, the program's
revenues are declining. In 2003 the pension system received
COP 2.2 trillion (USD 943 million) and only COP 1.9 trillion
(USD 815 million) in 2004. This system cannot sustain
itself without some drastic changes. The proposed pension
reform bill has passed 6 of the 8 Congressional debates.
Two debates in the Senate remain before the law can be
amended to the Constitution. The following lists the most
noteworthy reforms, most of which would apply only to those
who retire on or after August 1, 2010:

2. Retirement age to rise: Effective July 31, 2010,
Colombia's official retirement age would rise from 60 years
to 62 years for men and from 55 to 57 years for women.
There is an exception for workers who have a minimum of 15
years of service by July 31, 2010; their transition period
would end in 2014.

Advertisement - scroll to continue reading

Are you getting our free newsletter?

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.

3. 14 monthly pension payments drop to 13: Previously
those people who were eligible for public pensions received
14 payments throughout the year. The bill would eliminate
one of those fourteen pension payments for all retirees.
This provision is effective immediately upon passage for new
retirees, but will not affect current pensions.

4. Fewer privileged groups: The current pension system is
loaded with exceptions for diplomats, congressmen, oil
workers, and others. Excepted groups were allowed early
retirement and/or increased pension payments. The new
pension bill would eliminate most of these privileges by
August 1, 2010. Only the president of Colombia and those
who served in the military would be granted exceptions to
the pension regime.

5. Pension ceiling: Currently, 90 percent of those people
receiving pensions only obtain payments which are 1-2 times
the minimum wage (approximately USD 80-160 a month). Many
high level government officials receive pensions which are
much higher than the rest of the population. Beginning in
August of 2010, a pension can be no greater than 25 times
the minimum wage.

6. Comment: Colombia's pension reform legislation is now in
the hands of the Senate, which has until June 24 to pass the
bill through committee and a final plenary debate.

© Scoop Media

Advertisement - scroll to continue reading
World Headlines

UN News: Aid Access Is Key Priority

Among the key issues facing diplomats is securing the release of a reported 199 Israeli hostages, seized during the Hamas raid. “History is watching,” says Emergency Relief Coordinator Martin Griffiths. “This war was started by taking those hostages. Of course, there's a history between Palestinian people and the Israeli people, and I'm not denying any of that. But that act alone lit a fire, which can only be put out with the release of those hostages.” More

Save The Children: Four Earthquakes In a Week Leave Thousands Homeless

Families in western Afghanistan are reeling after a fourth earthquake hit Herat Province, crumbling buildings and forcing people to flee once again, with thousands now living in tents exposed to fierce winds and dust storms. The latest 6.3 magnitude earthquake hit 30 km outside of Herat on Sunday, shattering communities still reeling from strong and shallow aftershocks. More


Join Our Free Newsletter

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.