Practical instructions for the payment of the remaining contributions to the general pension system, corresponding to the months of April and May of 2020.

Let us recall that Decree 558 of 2020 authorized an economic relief in favor of employers and dependent and independent workers, partially exonerating them from the payment of the contribution to the General Pension System in the months of April and May of 2020 to counteract the effects of the sanitary emergency, setting as contribution rate 3% of the Base Contribution Income.

The Constitutional Court in judgment C-258 of 2020 declared the mentioned decree unconstitutional and with retroactive effects, so that those who took advantage of the measure, must pay the contributions corresponding to the periods in which the relief operated in a comprehensive manner, in the form and term determined by the National Government.

In compliance with the order of the High Court, Decree 376 of 2021 was issued, through which the mechanisms were established so that, within a term of 36 months as from June 1 of 2021, the missing contributions to the General Pension System are made.

In order to make effective the measures set forth in this Decree, the Ministry of Health and Social Protection issued Resolution No. 638 of 2021, through which modifications were introduced in the Integrated Contribution Settlement Form in order to advance the collection of the missing contributions of the affiliates.

As regards the scope of the new regulated and ordered guidelines, the following considerations must be considered:  

¿To whom does the provisions of Decree 367 of 2021 apply?

The rule applies to those employers of the public and private sectors and dependent and independent workers who have made partial pension contributions corresponding to 3% of the Base Contribution Income during the months of April and May 2020.

¿What is the term to make the missing payment?

The term will be 36 months from June 1, 2021, that is, until May 31, 2024. After June 1 of 2024, late payment interest will be charged to those who have not made the missing contributions to the General Pension System.

¿What is the percentage pending payment of the pension contribution and how should it be assumed?

The pending percentage is equivalent to 13% of the Base Contribution Income for the months of April and May 2020. Its payment must be assumed 75% by the employer, 25% by the employee and 100% by the independent worker.

However, Decree 376 of 2021 allows the payment of the missing contributions to be made in full by the employer or the worker, allowing whoever makes the payment to later collect the amount from the other obligated party.

The regulation even allows the employer to deduct from the employee's salaries and social benefits liquidation, the percentage of the pension contribution that corresponds to the employee to pay in its proportion.

¿Did the norm foresee special scenarios for the missing payment of pension contributions?

Decree 367 of 2021 foresees the following scenarios and the way to proceed:

1. If the employer company goes into liquidation or in cessation of payments, the payment of the pending contributions must be made as a priority in favor of its workers.       

2. If the worker retires or is removed from his position, the employer must withhold from the wages or emoluments pending payment the value of the contribution corresponding to 25% payable by the worker, in order to make the missing contribution.

3. If the worker is less than 3 years away from reaching the pension age, the employer must make the payment of the missing contributions before the date for accessing the pension right is reached.

¿What is the mechanism to be used to make the payment of the pending contributions?

In order to make the payment, the Integrated Contribution Payment Form enabled through a virtual window that allows the self-assessment and integrated payment to the Integral Social Security System and parafiscal taxes, which was also modified in accordance with the provisions of Resolution No. 638 of 2021.

¿What type of contributor and payroll must be used taking into account the new modifications in the Integrated Contribution Payment Plan?

Dependent workers who are going to make the payment of 25% of the missing contribution or all of it to the General Pension System corresponding to the months of April and May 2020, must use the type of contributor 14 "worker payment of missing pension contribution" and the type of payroll "N - Corrections Payroll".

Self-employed workers may also use the type of contributor 14 "worker payment of missing pension contribution" to pay 100% of the missing contribution to the General Pension System corresponding to the months of April and May 2020, and the type of return "N - Corrections Return".

The type of return "N - Corrections Return" must also be used by public and private sector employers for the payment of the fee of 75% or the total missing contribution to the General Pension System corresponding to the contribution periods for the months of April and May 2020.

Self-employed workers to whom the initial payment was made by a third party, as in the case of contractors who have omitted to make contributions to the Comprehensive Social Security System and whose contractor is authorized to make the payment with the amounts withheld from the contract, may also use the type of contributor 14 "worker payment of missing pension contribution", and the type of payroll "Y - Independent companies payroll".

¿What should employers, dependent and independent workers who are going to pay the percentage that corresponds to them or the total missing contribution of the contributions for the months of April and May 2020 take into account?

Employers as well as dependent and independent workers must take into account that at the moment of generating the correction form for the payment of the missing contribution, two records will be generated for each person, the first one will correspond to the payment made equivalent to 3% of the pension contribution and the second one will correspond to the missing percentage.

Both records must match aspects such as the value of the IBC, the code of the administrators and the news, and the amount of the contribution and the contribution to the Pension Solidarity Fund will vary.

¿What should be taken into account by dependent workers who are registered as contributor type 14 and who choose to pay the 25% rate or the total missing pension contribution, corresponding to the contribution for the months of April and May 2020?

1. The settlement and payment of contributions must be made through the information and collection operator through which the employer made the initial payment of contributions.

1. All the fields of the type 1 record corresponding to General Data of the Contributor must be filled in.
2. They must provide the information operator with the initial payroll number, type and document number of the employer who made the initial payment.

What should self-employed workers who are registered as contributor type 14 and who need to make any change in the IBC or register any news for the months of April and May 2020 take into account?

When the contributor needs to adjust the IBC or the new items for the contribution periods of April and May 2020, it will be necessary to generate two correction forms, one to adjust the missing percentage of pension contributions with respect to the IBC reported in those periods and against which the 3% benefit was applied, and the other adjusting the total IBC, or reporting the respective new item.

We hope that the instruction of practical rules for the payment of missing social security pension contributions for the months of April and May 2020 will be very useful. The correct application of the guidelines set forth in this document will greatly reduce the risks of possible audits by the pension administration entities and the Pension and Parafiscal Management Unit (UGPP), as well as penalties for late payment interest, derived from errors in the improper application of Decree 376 of 2021 and Resolution No. 638 of 2021.