CMS Expert Guide to Pensions in Colombia

The pension system in Colombia currently consists of two mutually exclusive regimes. One is the public pension fund, known by its acronym RPM, which is administered by a public entity. To qualify for a pension, members must have contributed for 1,300 weeks and reached the required age: 62 for men and 57 for women.

The other is the Private Fund, known as RAIS, which is managed by private companies. In this system, an individual must accumulate sufficient capital in their individual savings account in order to qualify for a pension. 

It is important to note that, on 14 June 2024, the Senate of the Republic of Colombia approved Law 2381 of 2024, which reforms the current pension system. This reform replaces the two existing systems with a pillar system, under which all workers would contribute up to 2.3 times the minimum wage (COP 3,274,050) to the public pension fund (RPM), and any contributions above that, up to 25 times the minimum wage (COP 35,587,500), would be made to private funds (RAIS), among other changes. 

However, this legislation has been challenged several times before the Constitutional Court, so there remains uncertainty regarding the legal effects of the new pension system.

In Colombia, there is only one type of private pension, which is that recognised under the RAIS. As mentioned above, this depends on the capital saved in the individual's account, derived from contributions made during their working life.

Following the recent pension reform, private pensions will no longer exist as a stand-alone system. Instead, an integrated pension system will be introduced, combining contributions to both public and private funds.

Currently in Colombia, every person with the capacity to pay must make pension contributions. Capacity to pay is understood to mean individuals earning at least the minimum wage (COP 1,423,500) and up to the maximum ceiling of COP 35,587,500, equivalent to 25 times the minimum wage, as of 2025.

Yes, currently the companies that manage pension funds are those previously authorised by the national government. As of the date of this chapter, here are four such companies: Porvenir S.A., Skandia S.A., Colfondos S.A., and Protección S.A.

As previously indicated, only companies authorised by the national government are permitted to manage a pension fund.

Yes, the mandatory monthly contribution is 16% of the worker’s salary.

The only requirement is that contributions must amount to 16% of the employee’s or self-employed worker’s salary. This salary must fall between one minimum wage (COP 1,423,500) and 25 minimum wages (COP 35,587,500).

7. What age are benefits taken?

In the RPM, the retirement age is 62 for men and 57 for women. In contrast, the RAIS does not impose a minimum age requirement; the only condition is that the individual has accumulated sufficient capital in their personal savings account. If this is not achieved, a minimum pension guarantee may be granted upon reaching 1,150 weeks of contributions.

When there is an employment relationship, the employer covers 12% of the pension contribution, while the employee contributes 4%. However, if the individual is self-employed or works independently, they are responsible for the full 16% contribution.

There is no registration requirement.

Pension contributions are exempt from all taxes.

Investment returns are not subject to taxation.

12. Are benefits taxed?

In Colombia, pension allowances are exempt from income tax. However, under the recent pension reform, only pension allowances exceeding 1,000 UVT per month will be subject to tax (UVT stands for Unidad de Valor Tributario or Tax Value Unit in English). For 2025, this threshold corresponds to a monthly allowance of COP 49,799,000. Any amount exceeding this will be taxable.

Currently, individuals affiliated with the RAIS are eligible for tax benefits. In such cases, individuals may claim a tax benefit equal to 25% of the maximum income of 2,500 UVT (COP 124,497,500) when making voluntary contributions to mandatory pensions. This amount is treated as income not constituting taxable income. In addition, individuals who contribute to a Voluntary Fund may receive a 30% tax benefit.

The maximum amount that can be declared as exempt income is 40% of 1,340 UVT. For the 2025 tax year, the value of 1,340 UVT is COP 66,730,660. Therefore, the applicable benefit will depend on where the member is making their voluntary contributions – whether to mandatory pensions or to a voluntary fund.

All pension funds are supervised by the Financial Superintendence of Colombia, the authority responsible for regulating and overseeing pension schemes, regardless of their structure, to protect the interests of members.

Pension funds are required to provide all information requested by the Financial Superintendence.

The Financial Superintendence is responsible for supervising the funds and must ensure they submit quarterly reports on the status of their accounts, with the aim of preventing any form of insolvency.

Any form of discrimination based on nationality, origin, sex, sexual orientation, race, skin colour, age, political or religious beliefs, marital status, social background or similar grounds is prohibited.

Before reaching retirement age – 62 for men and 57 for women – It is generally not possible to withdraw the accumulated funds. This depends on the regime to which the individual is affiliated. In the case of RAIS, if the individual has sufficient capital and at least 1,150 weeks of contributions, they will not be able to withdraw the funds but will instead qualify for a pension. 

However, under the RPM, if an individual reaches pensionable age but does not meet the required number of contribution weeks, they may be entitled to a refund of their contributions. 

Following the recent pension reform, it is no longer possible to withdraw funds directly. Instead, the individual will receive a lifetime income based on the amount saved.

Private and public pension funds are composed solely of their own personnel, with no involvement or influence from trade union organisations.

Although the employer has a duty to provide information to the employee, the employee has no involvement in decision-making or in changing the pension scheme.

Although Colombia has no specific regulation governing cross‑border pension activities, it is a party to the Ibero‑American Multilateral Agreement on Social Security, established by the Ibero‑American Social Security Organisation. Its purpose is to harmonise and coordinate social security systems among signatory countries. 

The countries listed in the agreement include Argentina, Bolivia, Brazil, Colombia, Costa Rica, Chile, Cuba, the Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Paraguay, Peru, Portugal, Spain, Uruguay and Venezuela. However, to date only 13 of these states have ratified the agreement.

In Colombia’s case, the agreement was approved and ratified on 15 July 2021. The practical effects – such as recognising periods of contribution or combining weeks of service – depend on whether the other state has also ratified the agreement and integrated it into its domestic law. If not, the agreement cannot be applied bilaterally.

A member may transfer from one pension fund to another every five years. However, there is currently a restriction in place: transfers are not permitted within ten years of reaching retirement age (62 for men and 57 for women).

Following the recent pension reform, as previously outlined, the aim is to eliminate the distinction between the two existing regimes and establish a unified system. Individuals will be required to contribute to both public and private schemes, depending on their income level.