The president of the National Association of Financial Institutions warns about high costs of public pensions in Colombia and proposes an increase in the retirement age and lower pension payments.
In the midst of ongoing fiscal crises in Greece and other European nations, Sergio Clavijo, president of the Colombian National Association of Financial Institutions (ANIF), has proposed a radical plan that includes many reforms aimed at preventing a similar crisis from happening in Colombia in the future.
According to report by website Portofolio.co, ANIF’s proposal would add five years to the current retirement age, so that women would retire at age 62 and men at age 65. The National Development Plan by Santo’s administration also recommended the increase, but was rejected by different public sectors and later the proposal was withdrawn.
Clavijo’s plan would weaken Social Security and in general do away with public pension plans. The final part of the proposal would decrease monthly pension payments to current retirees.
Clavijo called on the Colombian government to enact these changes as a way of preventing a future fiscal crisis in Colombia. He commented that right now the government “doesn’t seem to take it personally” that the fiscal crisis impacting many European countries is a result of over-generous public pension systems.
Citizens in many European nations have been clashing with their governments over budget cuts that drastically cut social nets such as social security and pensions. However, the article remarked that, in comparison with the decline in Europe, Colombia is currently undergoing rapid economic growth. A June 2011 IMF report projects that the country’s growth rate will be the 3rd strongest in the region during 2011.