Colombia’s government scrapped a limit on how much of workers’ mandatory pension savings could be invested abroad before the cap had changed a single portfolio. The Ministry of Finance and Public Credit issued Decree 1490 on Tuesday, 6 October, and posted it on its website. El Tiempo reported that the decree took effect Wednesday, 7 October, a day after publication.
The money belongs to ordinary workers. Mandatory pension funds held COP 557 trillion, about US$172 billion, on 31 July, according to ministry figures based on regulator data. Of that sum, COP 248 trillion, about US$77 billion, or 44.5%, sat in foreign investments.
What the Decree Undoes
The decree repealed three articles that Decree 369 added in April to Decree 2555 of 2010, the financial sector’s main rulebook. Those articles set a global 30% ceiling on foreign assets across the four mandatory fund types. Funds would have had to cut their exposure to 35% within three years and 30% within five, mainly by directing new contributions into Colombian assets.
Fund managers also had to file adjustment plans with the Superintendencia Financiera, the financial regulator, by 7 October. None had filed a plan as of 7 September, the regulator told the ministry.
Leftist former President Gustavo Petro made the cap part of his government’s policy, seeking to put more pension savings into Colombia. Conservative President Abelardo De La Espriella, in office since August, published a draft repeal on 10 September. The board of the ministry’s financial regulation unit approved it at an extraordinary session on Thursday, 1 October.
The Ministry’s Case, and Who Weighed In
Finance Minister Miguel Gómez Martínez presented the change as protection for savers. “Those resources do not belong to the fund managers; they belong to the workers,” he said, according to La República. The decree says the cap upset the balance between risk and return, raising risk and lowering expected returns. In an illustrative model, the ministry’s technical memo estimated that it reduced long-run expected returns from 6.80% to 6.26%.
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 industry’s applause deserves context. The cap would have sent real money back home. At July values, a 30% share would have meant shifting 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. The original policy aimed to direct that capital into the domestic economy.
Unanswered Questions for Savers
The repeal sets no new target for foreign assets, and it doesn’t order funds to move money abroad. How quickly managers might increase foreign holdings, if at all, remains unknown. The published documents included no portfolio figures after 31 July, and the decree doesn’t restate older fund-by-fund limits that remain in force.
The foreign share had already fallen from 48.4% at the end of March, before the cap took effect. The ministry attributed the drop to a stronger peso, not selling. The funds’ U.S.-dollar holdings grew by US$5.7 billion between March and July, reaching US$72.5 billion. Euro assets came a distant second at COP 11.5 trillion, about US$3.5 billion.
Colombia’s broader pension system is also changing. The Constitutional Court mostly upheld the country’s 2024 pension reform, Law 2381, on 25 August, with effect from 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 ministry said specific prudential limits and managers’ own risk controls will continue to protect workers’ savings.
Conversions in this report use the official TRM exchange rate of 3,238.88 pesos per U.S. dollar for Thursday, 8 October, which the Superintendencia Financiera certifies daily.
Why This Matters: Pension savings provide retirement security for millions of workers who don’t choose their fund’s investments and can’t easily walk away from mandatory contributions. The repeal removes a rule that would have pulled billions of dollars back into Colombia, a goal the previous government tied to domestic investment. The ministry argues that the cap lowered expected returns. But the decree sets no new foreign-asset target, leaves managers largely to their own risk controls and offers no post-July portfolio data showing where money is heading. Whether workers’ savings end up better protected, or simply more exposed to global markets, depends on regulators who must now prove they’re watching.