New pension decree could put $25 trillion at risk and reduce system savings, experts warn
The Ministry of Labor recently published a draft decree that modifies the rules for transferring resources from the Individual Savings Regime with Solidarity to Colpensiones...
TL;DR
- A draft decree proposes transferring about $25 trillion from private pension funds (AFP) to Colpensiones within 15 business days.
- This transfer aims to temporarily alleviate government finances by using these funds for current pension payments.
- Experts warn that this move would reduce savings in the new pension system, specifically impacting the Pension Pillar Savings Fund (Fapc).
- The Fapc could start with $5 trillion less in savings in 2026 and a cumulative deficit of $15.2 trillion by 2030 compared to the original reform plan.
- This reduction in savings could lead to the Fapc depleting faster, requiring future funding from the General National Budget and shifting fiscal burdens to later decades.