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Colombia presidential candidates agree need for pension reform -Breaking

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© Reuters. FILEPHOTO: Gustavo Petro (Colombia’s presidential candidate) arrives at a meeting with members of the Historical Pact alliance to discuss the vice-presidential formula. It took place in Bogota on March 22, 2022. REUTERS/Luisa Gonzalez/File Photo

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Nelson Bocanegra

CARTAGENA, Reuters – The most probable candidates for Colombia’s presidency elections agreed to reform Colombia’s pension system. This would provide greater coverage to millions of the poor and redirect subsidies.

The options available for financing this reform included a complex tax reform or more radical proposals such as saving from private funds for the retirement of elderly adults who don’t have enough money for retirement.

Colombia’s public pensions face a dilemma: expanding coverage is needed while the government has to pay more than $11.3 million annually to cover the shortfall.

Gustavo Petro (left-wing candidate) is leading election polls and has suggested using private pension savings to finance public pensions. He also proposed paying bonuses to 3 million people who don’t have enough money for retirement.

Private pension funds have assets of approximately $92 billion, which is almost 30% of the annual gross domestic product (GDP) in this country.

Petro declared that the right to pension is a “collective state guarantee” that relies on social solidarity, not private appropriation to detriment to all Colombians’ savings.

Economists are concerned about the proposal.

Federico Gutierrez second-favorite, the center-right contender, suggested maintaining the mix public and private system and eliminating subsidies of $5.3 Billion for high-value saving funds. He also proposed redirecting the money to pensioners who do not need them.

Gutierrez stated that “there are large reforms which are absolutely necessary” during Asofondos’ annual Congress in Cartagena, a Caribbean city.

He said, “The major reforms must happen within the first year.”

Sergio Fajardo was a Centrist Candidate. He proposed that Sergio Fajardo support the 3.6million seniors over 65 who are not eligible for a pension, income, or a monthly payment of $133.

To finance this plan, $4.79Billion would be needed. Fajardo (fourth in the polls) would help to fund it by pushing for tax reform that would amount to $8.78B through Congress.

Fajardo declared, acknowledging the unhappiness of citizens with their pension system: “People cannot accept anymore.”

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