Colombia has repealed a 30% ceiling on foreign investments by mandatory private pension funds, which hold COP 557 trillion, about US$172 billion, in workers’ savings. At 31 July, they had invested COP 248 trillion, about US$77 billion, abroad—44.5% of their total holdings.
Who Controls the Savings
Decree 1490, issued by the Ministry of Finance and Public Credit and dated Tuesday, 6 October, repealed the cap. El Tiempo reported that it took effect Wednesday, 7 October. Finance Minister Miguel Gómez Martínez said the change protects Colombians’ savings. “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 disrupted the balance between risk and return, raising risk while lowering expected returns. In an illustrative model, the ministry’s technical memo estimated that the limit cut long-run expected returns from 6.80% to 6.26%.
Asofondos, the trade group for fund managers led by Andrés Velasco, welcomed the repeal as a boost to diversification. Velasco said a wider margin helps managers handle risk and seek returns for Colombian workers, La República reported. They can now work with more room.
What the Cap Would Have Required
Decree 369 added the repealed articles in April to Decree 2555 of 2010, the financial sector’s main rulebook. The articles set a global 30% limit on foreign assets across the four mandatory fund types. Funds would have needed to cut foreign exposure to 35% within three years and 30% within five, mainly by directing new contributions into Colombian assets.
Before the repeal, the cap hadn’t changed how the funds invested. The financial regulator, the Superintendencia Financiera, told the ministry that fund managers had filed no required adjustment plans as of 7 September, despite a 7 October filing deadline.
At July values, meeting the 30% limit would have meant moving about COP 81 trillion, or about US$25 billion, into Colombian assets. When officials drafted the cap in January, Forbes Colombia estimated that more than COP 120 trillion, about US$37 billion, would return home.
Foreign holdings accounted for 48.4% of fund assets at the end of March, before the cap took effect, and 44.5% at the end of July. The ministry attributed the lower share to a stronger peso, not asset sales. The funds’ 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.
A Repeal Without a New Target
The board of the ministry’s financial regulation unit approved the repeal at an extraordinary session on Thursday, 1 October. Leftist former President Gustavo Petro had made the 30% cap policy; his 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 repeal sets no new target for foreign assets and doesn’t direct funds to move money abroad. The published documents did not include portfolio figures after 31 July, and the decree doesn’t restate older fund-by-fund limits that remain in force. How quickly managers might increase foreign holdings, if at all, isn’t known.
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 ministry said specific prudential limits and managers’ own risk controls will continue to protect workers’ savings.