Colombia’s government has repealed a rule that would have forced private pension funds to shift billions of dollars from foreign assets into Colombian investments, changing the limits on how managers can invest workers’ mandatory savings. The decree removes the 30% ceiling before it changed how the funds invest.
Workers’ savings, decisions from above
“Those resources do not belong to the fund managers; they belong to the workers,” Finance Minister Miguel Gómez Martínez said, according to La República. The declaration puts workers at the center of a decision made by the Ministry of Finance and Public Credit, its financial regulation unit and the financial regulator. Workers’ savings form the vast pool at issue, while institutions and fund managers decide where those savings may go.
Decree 1490, dated Tuesday, 6 October, repealed three articles that Decree 369 had added in April to Decree 2555 of 2010, the financial sector’s main rulebook. El Tiempo reported that the repeal took effect Wednesday, 7 October, a day after publication. The articles set a global ceiling of 30% on foreign assets across the four mandatory fund types.
Under the former rule, funds would have had to reduce foreign exposure to 35% within three years and to 30% within five, mainly by directing new contributions into Colombian assets. Fund managers also had to file adjustment plans with the Superintendencia Financiera by 7 October. The regulator told the ministry that no plans had been filed as of 7 September.
The ministry’s decree says the cap upset the balance between risk and return, increasing risk and lowering expected returns. In an illustrative model, its technical memo estimated that the cap reduced long-run expected returns from 6.80% to 6.26%. Specific prudential limits and managers’ own risk controls, the ministry says, will still protect workers’ savings.
A policy reversed before the money moved
The cap came from leftist former President Gustavo Petro, whose government wanted more pension savings invested in Colombia. Conservative President Abelardo De La Espriella, in office since August, published a draft repeal on 10 September. The ministry’s financial regulation unit board approved the reversal at an extraordinary session on Thursday, 1 October. A change in government, then, brought a change in the rules governing the same pool of workers’ money.
Mandatory pension funds held COP 557 trillion, about US$172 billion, on 31 July, according to ministry figures based on regulator data. Of that total, COP 248 trillion, about US$77 billion, or 44.5%, went into foreign investments. The foreign share stood at 48.4% at the end of March, before the cap took effect. The ministry attributed the decrease to a stronger peso, not to funds selling foreign assets. Their U.S.-dollar holdings grew by US$5.7 billion between March and July, reaching US$72.5 billion. Euro assets stood at COP 11.5 trillion, about US$3.5 billion.
At July values, a 30% share would have required moving about COP 81 trillion, or about US$25 billion, into Colombian assets. When the cap was drafted in January, Forbes Colombia estimated that more than COP 120 trillion, about US$37 billion, would return home. Those were projected shifts, not completed transfers.
No new target, no grassroots response reported
Asofondos, the fund managers’ trade group led by Andrés Velasco, welcomed the repeal as a boost to diversification. Velasco said a wider margin helps manage risk and find returns for Colombian workers, La República reported. The repeal sets no new target for foreign assets and doesn’t order managers to move money abroad. Whether, or how quickly, they increase foreign holdings remains unknown.
The published documents contain no portfolio figures after 31 July, and the decree doesn’t restate older fund-by-fund limits that remain in force. Colombia’s 2024 pension reform, Law 2381, was mostly upheld by the Constitutional Court on 25 August and is set to take effect on 1 April 2027. The government estimates that workers in the reform’s transition regime hold about 45% of the private system’s money, reducing the base to which the cap would have applied. The account of this policy reversal describes no worker-led campaign, mutual-aid effort or other grassroots response. For now, the rule changes; control over investment decisions remains with the financial apparatus and fund managers.