The president of Colombia, Gustavo Petro, asked private pension funds on Tuesday to bring to the country the savings of affiliates who are abroad in the face of the alleged collapse of “foreign markets” due to the collapse of the US bank Silicon Valley Bank ( BLS).
“I ask the administrations of private pension funds, given the collapse of foreign markets, to bring pension savings to the country,” the president said on Twitter.
Petro added that “today 55% of the pension fund portfolio, that is, the ‘stock’ of contributors’ savings, is outside the country.”
The president specified that “55% of the RAIS (Individual Savings with Solidarity) portfolio is abroad.”
This regime is administered by four private funds, which are Skandia, Protección, Colfondos and Porvenir.
The SVB, based in California and considered the sixteenth largest bank by capitalization in the US, announced last Wednesday that it was seeking a capital increase to face its financial difficulties.
That announcement led many clients to withdraw their deposits, which is popularly known as a “bank run”, which is why regulators had to close the bank on Friday as a result of a lack of liquidity, which in turn affected the financial sector in the US and other countries.
In fact, on Sunday the US regulatory bodies closed the New York Signature Bank, which provided services, above all, to law and cryptocurrency companies.
Petro pension reform
The Government will present a pension reform project to Congress this month because it considers that the current system “is a business where what the person saves for years is not enough to have a pension.”
The objective, according to Petro said in January, is “for an important part of citizen contributions to be saved in the public fund.”
Petro also stated that the changes will allow the State to “pay a decent pension bonus (…) of 500,000 pesos a month (about US$105)” to each of the nearly three million older adults who require a pension.
In addition, he pointed out that it is about reaching full coverage in the pension system and guaranteeing that when a person ages they have access to retirement.