On Tuesday, July 16, 2024, the President of the Republic signed Law 2381 of 2024, known as the Pension Reform, aimed at establishing a new comprehensive social protection system for old age, disability, and death through the recognition of rights according to a multi-pillar system.

However, the new law includes a two-year transition period from its effective date (July 1, 2025). During this period, women who have contributed at least 750 weeks and men who have contributed at least 900 weeks, and who are under 47 years old (women) and 52 years old (men), may choose to retain the current system or opt for the new system established by the reform. In other words, these individuals will not be subject to the changes introduced by this law.

The new system is structured around four main pillars:

• Solidarity Pillar: This pillar will ensure coverage for all Colombian citizens residing in the country who are over 65 years old (men) and 60 years old (women). It will also include people with disabilities who are over 55 years old (men) and 50 years old (women), who have a loss of work capacity of 50% or more, and who are in conditions of poverty or vulnerability.
• Semi-Contributory Pillar: This pillar is aimed at system affiliates who reach retirement age but do not meet the requirements for a contributory pension due to insufficient contributions. The funding for this benefit will come from the national budget and individual contributions.
• Contributory Pillar: This pillar is aimed at dependent and independent workers, public servants, and people with the economic capacity to make contributions that allow them to access a comprehensive pension for old age, disability, or death. It is structured into two components:
  • Average Premium Component: Covers people with a contribution base income between 1 and 2.3 current legal monthly minimum wages (SMLMV).
  • Complementary Individual Savings Component: Includes people with incomes above 2.3 SMLMV, financed by the part of the contribution base income that exceeds 2.3 SMLMV up to a maximum of 25 SMLMV. Benefits are based on accumulated individual savings and their financial returns.
• Voluntary Savings Pillar: This pillar is aimed at those who wish to supplement their pension through voluntary savings managed by financial entities in accordance with established regulations.

It is important to note that the savings accumulated by affiliates in their accounts will continue to be managed by the AFPs and will only be used for the recognition of pensions. These savings will be transferred to Colpensiones only at the time of retirement.

Finally, this law seeks to recognize the efforts of working and caregiving women by granting them 50 weeks of contributions for each child, up to a maximum of three children.