On 31 January 2024, the Labour Chamber of the Supreme Court of Justice issued Sentence SL 138 of 2024, in which it modified the position on the equivalence of time contributed to the General Social Security Pension System, in particular, on how the weeks, months and years should be counted for the consolidation of economic benefits.
Prior to analyzing this jurisprudential milestone, it is worth recalling two regulatory moments that marked the way in which pension contributions were accounted for:
1. Agreement 049 of 1990. Before the issuance of Law 100 of 1993, Agreement 049 of 1990 "whereby the General Regulations of the Mandatory Social Security for Disability, Retirement and Death", approved by Decree 758 of 1990, was applicable, among others. Since the economic benefits for disability and retirement were calculated on the basic monthly salary, it was necessary to calculate the weeks that made up the month to find the employee's salary. Therefore, Article 20 states:
"Article 20. Integration of common risk disability and old age pensions.
(...)
Paragraph 1. The basic monthly salary is obtained by multiplying by the factor 4.33, the hundredth part of the sum of the weekly salaries on which the employee contributed in the last one hundred (100) weeks.
The factor 4.33 is obtained by dividing the number of weeks in a year by the number of months".
In other words, the arithmetic operation was as follows: a week always has 7 days and the year has 12 months. However, the year can have 365 or 366 days, depending on whether it is a leap year or not. Under the general rule, of 365 days per year divided by 12 months, the average number of monthly weeks in a year is 4.33, as follows:
365 days per year / 7 days per week = 52 weeks per year |
52 weeks per year / 12 months per year = 4,33 weeks per month |
2. Issuance of Law 100 of 1993. With the enactment of this law, which was intended to unify the different pension rules that existed, the following provisions were established regarding contributions:
"Article 33. Requirements to obtain the retirement pension.
(...)
Paragraph 2. For the purposes of the provisions contained in this Law, a week contributed shall be understood as a period of 7 calendar days. Payments shall be invoiced and collected based on the number of days contributed in each period".
This law should be harmonized with Article 18 of the same regulation, which establishes that:
"Article 18. Basis of Contribution. The basis for calculating the contributions referred to in the preceding article shall be the monthly salary (...).
In consequence, given that the monthly salary is paid for equal and due periods (article 134 of the Colombian Labor Statute) the following argument was peaceful:
The monthly salary comprises 30 days ⇢ the year has 12 months ⇢ therefore, the year is composed of 360 days which is the result of multiplying 30 monthly days by 12 annual months. |
In this sense, if it is undisputed that the week has 7 days, the following is the arithmetic operation to find the weeks in a year:
| 360 days per year / 7 days per week = 51.42 weeks |
Since this interpretation provided that months are always 30 days, the monthly calculation of weeks is (was) as follows:
30 days per month / 7 days per week = 4.28 weeks per month |
In line with the above, the standardization of the year into 360 days and the month into 30 days meant that members of the Social Security Pension System did not have 0.71 weeks (5 days) in a normal year and 0.85 weeks (6 days) for pensions in a leap year.
3. Sentence SL 138 of 2024. As a consequence of the jurisprudential change, which is the subject of this article, the Court resumes the opinion established before the entry into force of Law 100 of 1993, in the sense that each of the calendar days in which the member has been exposed to the risks of disability, seniority, and death should be reflected.
Nevertheless, the verdict does not call for modifying the Planilla Integrada de Liquidación Aportes - PILA, which currently only allows contribution values between 0 and 30 days. Therefore, payroll deductions will be for a maximum of 30 days and the labor history for pensions must count the contributions in calendar days (28, 29, 30, or 31). In other words, it does not change the "form of contribution" as it has been erroneously interpreted. Still, it changes the form of calculating the equivalence of time contributed to the pension.
The new position of this verdict is especially relevant, taking into account that it reduces the contribution time for the recognition of economic benefits, i.e. the 1,300 weeks to obtain the retirement pension in the Regimen de Prima Media con Prestación Definida (hereinafter "RPM"), would no longer be equivalent to 25 years and 4 months, but to 24 years and 11 months, and therefore an approximate reduction of 5 months of contribution to consolidate the right.
The same effect would result for the 50 additional weeks to the 1,300, which increases the 1.5% in the replacement rate in the RPM. As well as the benefit of transition regimes, refund of balances, substitute indemnities, and minimum pension guarantees, among other benefits that are part of the Social Security Pension System.
On the other hand, it is noted that the Corporation did not urge Colpensiones to modify, among others, the column [45] of the labor history:
[34] Identificación Aportante | [35] Nombre o Razón Social | [36] RA | [37] Periodo | [38] Fecha De Pago | [39] Referencia De Pago | [40] IBC Reportado | [41] Cotización Pagada | [42] Cotización Mora Sin Intereses | [43] Nov. | [44] Días Rep. | [45] Días Cot. | [46] Observación |
*This excerpt is taken from the labor histories, which are only published in Spanish.
This column, to date, details the days of contribution over a maximum value of 30, even when the month includes 28, 29, 30, or 31 days. Although it would be logical to conclude that the pension administrators should change the way of reporting the days contributed, it is no less true that the sentences have inter partes effects, so Colpensiones would not be obliged to modify the labor histories.
Additionally, it would not be the first time that Colpensiones, among other administrators, failed to apply the modifications introduced by the Labor Chamber of the Supreme Court.
Likewise, the verdict is silent on the impact that this decision could have on the formula for calculating the weighted contribution that each contribution base income represents in the days contributed. This is because the base contribution income is currently distributed between 1 and 30 days, as appropriate. However, nothing was provided as to whether this weighting should be distributed in 28, 29, 30, or 31 days, which affects the calculation of the base liquidation income, to know how much the pension payment should be calculated.
Finally, this new decision opens the door for all those economic benefits in the process of recognition or with decisions already issued, to be reevaluated under the present equivalence of time, except those that have already been ventilated before the Ordinary Labor Justice.
