Colombia presidential candidates agree need for pension reform
By Nelson Bocanegra
CARTAGENA (Reuters) – Candidates most probably to win Colombia’s presidential elections on Friday agreed for the necessity to reform the nation’s unbalanced pension system in order that it supplies larger protection for hundreds of thousands of poor folks and redirects subsidies.
Concepts for financing the reform ranged from a cumbersome tax reform to extra radical plans corresponding to utilizing financial savings from non-public funds to pay the pensions of older adults who haven’t managed to avoid wasting sufficient for his or her retirement, amongst others.
Colombia’s public pensions are beset by the necessity to develop protection whereas contending with a shortfall of greater than $11.3 billion {dollars} a yr which the federal government should cough up to make sure funds to the two.4 million folks affiliated with the system.
Left-wing candidate Gustavo Petro, who leads election polls has proposed utilizing pension financial savings from non-public funds to assist finance pensions within the public system and pay bonuses to some 3 million individuals who do not need sufficient for retirement.
Non-public pension funds handle property value round $92 billion {dollars}, equal to virtually 30% of the nation’s annual gross home product (GDP).
In response to Petro’s manifesto, the proper to a pension “will likely be a collective state assure based mostly on social solidarity and never on the non-public appropriation of advantages to the detriment of the financial savings of all Colombians.”
The proposal has raised fears amongst economists.
Second-favorite Federico Gutierrez, the center-right candidate, proposed sustaining the blended private and non-private system whereas eliminating subsidies value $5.3 billion {dollars} for high-value financial savings funds and redirecting them to those that do not need pensions.
“There are massive reforms which are completely needed,” Gutierrez stated through the annual congress of the pension fund affiliation Asofondos within the Caribbean metropolis of Cartagena.
“The large reforms need to occur within the first yr,” he added.
Centrist candidate Sergio Fajardo proposed supporting the three.6 million adults aged over 65 with out a pension or earnings with funds value some $133 a month.
The plan would want some $4.79 billion to finance and Fajardo, who’s fourth within the polls, would fund the transfer by pushing a tax reform value $8.78 billion via Congress, he stated.
“Individuals can’t take anymore,” Fajardo stated, recognizing residents’ unhappiness with the pension system.
(Reporting by Nelson Bocanegra; Writing by Oliver Griffin; modifying by Diane Craft)
