Amid limited progress, pension deadlines are tightening

There are two months left until the new Comprehensive Social Protection System for Old Age, Disability, and Death of Common Origin in Colombia, popularly known as the pension reform, comes into effect. Amid the National Government's race against time to have everything ready, the balance so far shows little progress and significant work to be done.

A recent report presented by the Ministry of Labor to Congress shows that although significant efforts have been made to advance the regulations and administrative structure, time has been shortened, and this transition was not immune to the effects of budget cuts.

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Specifically, the Ministry of Labor revealed that challenges persist in the technological and operational implementation components and that, beyond the decrees issued at the beginning of the year to regulate the Accai and tax pensions exceeding 1,000 Tax Value Units, they are currently continuing to work on regulations that they hope to issue before the end of the week.

Regarding financial management, Congress was informed that the budget allocated for the implementation of the reform in 2025 amounts to $1.143 billion, resources earmarked exclusively for investment, with no operating expenses reported to date. Of these funds, as of March of this year, approximately $262 million had been committed through three service provision contracts that support regulatory and preparation tasks.

Single Regulatory Decree

One of the greatest concerns regarding the future implementation and entry into force of the pension reform relates to the Single Regulatory Decree, the legal backbone of the new system's operation. It has not yet been issued, as it was subject to public consultation until April 25.

One of the figures who has pushed hardest for the issuance of this regulation is Senator Angélica Lozano. While acknowledging that drafting a regulation of this magnitude is not easy, she made it clear that its publication cannot be postponed, as the various stakeholders in the new system need to be familiar with it in order to adapt to what is coming.

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"More than a thousand comments were collected on one or more drafts, which were ultimately consolidated into this decree. We know there's a rush, and I myself recognize that we're behind schedule. Drafting a decree is a complex task, but the State's real challenge is to comply with and implement it," she said.

Lozano also stated that "although its publication is urgently needed , I also value the importance of carefully reviewing the details—because, as they say, the devil is in the details—and regulating everything requires precision," emphasizing that the task is not easy and requires careful progress.

It's worth noting here that the delay in publishing the DUR has not significantly affected recruitment, according to the Ministry of Labor, as work has been ongoing in parallel on the legal, technological, and inter-institutional coordination aspects necessary to ensure the system can begin operations on the scheduled date.

In fact, the Pension Reform Operational Transition Committee, which includes the Labor, Treasury, the Financial Superintendency, Colpensiones, and the AFPs represented by Asofondos, has held 18 follow-up sessions.

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"The methodology and roadmap for the technological and operational adaptation of the new system were established, with a view to July 1, 2025," the official report states. The Regulatory Committee also operated, holding 35 technical roundtables to coordinate the issuance of complementary regulations.

In addition to the Single Regulatory Decree, the decree on the governance of the Contributory Pillar Savings Fund is not yet ready . Both documents have already undergone public consultation, with hundreds of comments analyzed, and are expected to be signed in the coming weeks. Technical resolutions such as those on the RUAF and PILA are also being finalized.

In addition, approximately 55 articles of Law 2381 of 2024 remain to be regulated, requiring specific decrees or resolutions for operational, technological, and administrative aspects of the new system. These include details on interoperability, transition, week validation, affiliation reports, and the functioning of the ACCAI (National Accreditation Authority). Authorities have prioritized these regulations through inter-institutional technical committees to ensure their issuance before July 1, 2025.

Court Earrings

For Andrés Francisco Monroy Fonseca, senior manager of Tax and Legal Services at Crowe Co, in addition to all of the above, it should not be overlooked that the Constitutional Court has admitted two lawsuits challenging the legality of the legislative process for the reform, which could affect its implementation if it were to be declared unconstitutional. However, he noted that the Attorney General's Office recently asked the high court to endorse its legality.

"Meeting the deadline for the pension reform to come into effect depends on several factors. On the one hand, progress in regulations and institutional preparation is positive, with a high percentage of decrees already drafted and a significant budget allocation for Colpensiones," he stated.

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On the other hand, this expert suggests that the lawsuits admitted by the Constitutional Court introduce an element of uncertainty, and that if this court were to confirm that this law is unconstitutional, its implementation process would be affected, either through significant adjustments or the need to draft new legislation. Thus, based on the government's assessment and the experts' warnings, it is clear that at the regulatory level, if the planned decrees are issued in the coming weeks and the initial phases of the technological projects are completed, the implementation of the reform could meet the minimum requirements for its launch. However, the first six months of the new system could be a period of significant adjustments and adaptations.

While waiting for the issuance of the Single Regulatory Decree and progress on information systems contracts, the countdown continues. The government's goal is to ensure that, despite initial delays, Colombia will see the implementation of one of the most ambitious pension reforms in recent decades on July 1, 2025. However, as technical sources acknowledge, the timeline for its implementation is already very tight.