Colombian President Gustavo Petro has lashed out this Friday against private pension funds and stressed the importance of the state providing some kind of income during retirement, as most citizens have not earned enough during their working lives to be able to make ends meet with private sector savings.
In his first public appearance after recovering from a flu, Petro pointed out that in private funds there is a system of forced savings through which financial institutions earn a commission for administering the resources of workers and businessmen, which he describes as «playing with money» and not a pension.
«As the majority of the working people of Colombia did not earn even a minimum wage, on average, in their existence (…) there will never be a sufficient monetary mass unless the State helps and puts of the Budget so that there can be some kind of income after the time to retire», he said as reported by ‘El Colombiano’.
After this, the President defended his pension reform, which will be debated next year and comprises three steps. A solidarity bonus of 500,000 pesos (about 995 euros) for all retirees, a contributory one by which every working person will contribute with a base of between one and four minimum wages and a last optional one for those who want to increase their pension.
The Colombian newspaper reports that Asofondos, a company in the sector that groups Colfondos, Porvenir, Protección and Skandia, shares the need to increase public coverage in pensions and the need to reform the current system, but disagrees with the formulas proposed by Petro’s government.
Thus, the union suggests that the solidarity bond be financed with the sale of the country’s assets, the use of Ecopetrol’s dividends and the elimination of subsidies to the highest pensions in the public system.
