What happens to an employee’s pension contributions who works and contributes abroad?

In recent years, different international organizations have emerged, with the aim of creating and strengthening ties of cooperation and coordination between Nations. From this harmonization, the Ibero-American Community of Nations was born as a solidarity and voluntary project of the Ibero-American States, seeking an approach for mutual cooperation to nurture international relations between Spain, Portugal, and Latin America.

In today's globalized world, no state has been immune to this phenomenon and the Colombian state has not been the exception, many foreign companies have decided to invest in the country and these investments generate the entry of foreign workers.

It is for this reason that Law 797 of 2003 modified the Social Security System, introducing a crucial issue which is the employment of foreigners. This rule establishes that foreigners who reside in Colombia and are not covered by any pension regime in their country of origin or in any other can be legally and voluntarily linked to a Pension Administrator in Colombia.

Additionally, Convention 97 of the International Labor Organization (ILO) defines that the countries that are members must guarantee that the regulations related to Social Security System will be applied to migrant workers within their territory. Also, the Inter-American Court of Human Rights considered that the migrant, by having an employment relationship, has rights that must be recognized and guaranteed regardless of their regular situation in the State of employment.

In order to guarantee the rights of foreigners who work in countries other than their country of origin, the International Convention on the Protection of the Rights of all Migrant Workers and their Families was signed, which defines the migrant worker as the person who performs or has performed a remunerated activity in a State of which he is not a national. 

This Convention states that these workers will enjoy the same rights as nationals, as long as they meet the requirements established in the legislation of that State. However, for the cases in which the applicable legislation does not allow these workers to enjoy any benefit, the return of the contribution will be recognized, as a consequence of the employment relationship.

The Convention was approved in Colombia under Law 146 of 1994, and the Constitutional Court indicated that the States that are members acquire the commitment to apply to all migrant workers the human rights provided in this Convention, without any type of discrimination.

The approved Law allows the International Community to know the needs of employees who move from one country to another and can have a guarantee of economic coverage against possible contingencies such as old age, disability, or death, and for this reason, it has created a series of principles that govern coordination and allow the projection of the Social Security Systems of each country, these being the following principles: 

• Principle of the uniqueness of the applicable legislation: it consists of the fact that only one legislation will be applied to the worker in its entirety and not several parts because the reason for this principle is to avoid double taxation. Therefore, the Law that must be applied will be that of the State where you carry out your work activity.

•  Principle of equal treatment: all nationals must have the same rights and be subject to the same conditions as migrants, that is, any discrimination between them must be prohibited.

• Principle of aggregation of contribution periods: the worker will add up all his contribution periods as if he had contributed only in one State, thanks to mutual coordination between the databases of the systems that have been merged for the benefit of migrant workers in a single Social Security System.

As a result of the legislative progress, in 2007 the Ibero-American Multilateral Agreement on Social Security was signed, which aims to protect the rights of migrant workers for the coverage of the Social Security System, in order to achieve cooperation, as well as due coordination by the Member States, without altering the internal systems of each country, promising equal treatment for both migrant workers and their dependents.

Thanks to this multilateral Agreement, Ibero-American employees regardless of their nationality have the possibility of adding the pension contribution periods, accredited in the different countries that are part of the Agreement, warranting the conservation of their rights in the course of acquisition. Likewise, the Agreement allows for harmony between the Social Security administering entities of each country, facilitating the application and recognition of the rights of workers and their families. 

For Colombia it has been a great advance at the international level, having multilateral agreements such as the one mentioned above, because it is the mechanism that guarantees the right to obtain a pension for those foreign employees who work in Colombia, and for Colombian nationals who have an employment relationship in the member countries of the Agreement such as Argentina, Bolivia, Brazil, Chile, Ecuador, El Salvador, Paraguay, Peru, Portugal,  Dominican Republic, Uruguay, Cuba, Mexico and Spain. This type of treaty contributes to expanding the coverage of the transnational Social Security System and promotes equality between nationals and foreigners.

That is why, on May 1st, 2023, the National Government signed the act of application of the Ibero-American Agreement, which will come into force in Colombia on August 1st, 2023, and which seeks to support and protect the pension rights of migrant workers who contributed or who continue contribute in one of the member countries, in order to safeguard the contingencies of old age, disability and/or death.