Colombia is set to restructure its pension system by July 1, 2025, introducing a four-pillar model to enhance old-age income support. The reform, approved in June 2024, includes compulsory and voluntary programs tailored to various contribution levels, with the aim of aiding a broader section of the population.

Colombia plans to implement a new pension system featuring a four-pillar structure beginning July 1, 2025. This system includes a solidarity program, semi-contributory program, contributory program, and a voluntary program aimed at providing greater old-age income support for the nation’s citizens. The pension reform bill received congressional approval in June 2024, with the first regulations having been issued on October 3, 2024.

The forthcoming pension reform in Colombia marks a significant shift towards enhancing old-age financial security through a four-pillar system. It emphasizes inclusivity by accommodating diverse income levels and requires adjustments in employer contribution practices. Employers should prepare for these changes by adapting payroll systems and seeking guidance on their implications for employee benefits. Overall, the reform seeks to improve support for Colombians, particularly those in vulnerable situations, thereby ensuring better financial stability in retirement.

Original Source: global.lockton.com