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Payment of pension contributions that were not recognized during the months of April and May 2020.

DECREE 376 OF 2021: PARTIAL CONTRIBUTIONS FOR THE MONTHS OF APRIL AND MAY 2020

Considering the economic and health crisis generated by the global COVID-19 pandemic, last year the Government through  Decree 558 of 2020, established that for the periods of April and May 2020 which contributions should be made in the months of May and June 2020, public and private sector employers and independent employees who opted for the relief would pay 3% of the contribution to the General Pension System, this to cover pension insurance costs and the value of the administration commission. However, once the constitutionality of these dispositions was studied, through ruling C-258 of 2020 the Constitutional Court declared it unconstitutional because the government was not vested to decide that these resources could be used for a purpose other than pension coverage. Therefore, it ordered that the government, in its powers, adopts and implements a mechanism within a reasonable period, to guarantee that the payment of the missing contributions to the General Pension System, corresponding to the periods established by the decree studied is done, and that the reestablishment of the affiliation of retired people, under the programmed retirement scheme who were transferred to COLPENSIONES (public pensions fund), is guaranteed.

Consequently, the Ministry of Labor issued Decree 376 of 2021 of April 9, 2021, which has the following main topics to consider:

  1. Public and private sector employers, and dependent and independent employees who have benefited of the 3% contribution relief of the Pension System in the months of April and May 2020, will have 36 months counted from June 1st, 2021, to make the payment of the missing contributions.
  2. Online payments operators will start activating the payment forms since June 1st, 2021, without generating default interest within the stipulated period.
  3. For the purposes of the percentage of the contribution that employees must assume, that is 25%, the employer may deduct the value of the employee’s salary, without being obliged to request his/her authorization.
  4. Employer companies that went into liquidation or that were declared in default of payments, should make the missing payments in favor of their employees as a priority.
  5. In the case of employees whose contract was terminated or are removed from their position, the employer entity must retain from the wages pending, the amount correspondent to the contribution in charge of the employee (25% of the contribution).
  6. In the case of employees who stop working in a company, and for this reason only the company’s contribution payment corresponding to 75% was made, the employees may make the payment of the missing percentage, that is 25%. In the event that the payment is done after the 36-months period has elapses, default interests will apply.
  7. In any case, the payments of the missing contributions to the General Pension System that have not been made before June 1st, 2024, will generate default interests.

Authors

Portrait of Adriana Escobar
Adriana Escobar
Partner
Bogotá
Portrait of Sandra Mora
Sandra Mora
Senior Associate
Bogotá
Portrait of Ana María Cubillos
Ana María Cubillos
Associate
Bogotá
Portrait of María Paula Navarro
María Paula Navarro
Associate
Bogotá
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