Should I Switch Pension Funds or Not?

In an earlier article on pensions, we touched on how important it is for people to make an informed, free, and voluntary decision about which pension regime — public or private — to stay in, with the two options in Colombia being: Colpensiones or private funds (Skandia, Colfondos, Protección, Porvenir, etc.).

Law 100 of 1993 established that no one can switch regimes once they're 10 years or less from the age that entitles them to a retirement pension — that is, once women turn 47 or men turn 52. However, some people who transferred to the private regime when this law took effect later passed those ages without managing to transfer back to the public regime (Colpensiones), because they didn't understand the differences between the regimes, as a result of private funds failing to give them truthful, adequate information.

As a result, these people didn't know which of the two regimes would have been more beneficial for them and, as they approached or reached retirement age, were surprised to find that the private fund would pay them a pension under different conditions than they expected — for example, a lower amount.

To address this problem, since 2008 courts have ordered the transfer of these people back to Colpensiones, because it has been proven that the funds genuinely failed to provide clear, precise, and detailed information about the consequences of transferring from what was then the Social Security Institute — now Colpensiones — to private pension funds. Labor judges have therefore declared such transfers ineffective.

If someone enrolled in a private fund is over 47 (women) or over 52 (men), has contributed for at least 24 years, and their most recent monthly pension contributions exceed 2 monthly minimum wages, they're entitled to request and file a legal action to return to Colpensiones.

We've helped several people obtain a pension under fair conditions, with a high success rate, so we recommend seeking legal advice on this matter. If this is your situation, at Consejurídico we'll guide you through the process — you can contact us by clicking here.

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