- It is necessary to raise individual awareness of the importance of saving for pension purposes and adjust current pension models.
- On average, in Latin America, workers retire with 60% of their last salary, highlighting the importance of increasing levels of supplementary savings.
- +Protección is an easy and dynamic voluntary savings solution that adjusts to the country's longevity reality, as only 4 out of 10 citizens allocate part of their income for this purpose.
- The country needs a reform encouraging savings and benefits current and future generations.
Bogotá, Colombia, November 18, 2023. The increasing longevity and transformations in labor dynamics in countries like Colombia highlight the urgent need for a proactive approach to saving for the future.
The reality that we are living longer underscores the importance of saving from an early age, recognizing that financial planning throughout life is essential. In this scenario, where labor flexibility and longevity converge, current and future generations must commit to saving significantly.
On average, in Latin America, workers retire with 60% of their last salary, which demonstrates the importance of increasing levels of supplementary savings. According to a study by Asobancaria, only 4 out of 10 citizens allocate part of their income for this purpose.
In this scenario, Protección, a leading company in Colombia in voluntary savings administration and one of the main AFPs in the country, proposes, under the launch of +Protección, a new challenge to the country: to elevate the culture of saving and begin to design a complementary pension plan that allows each person to counteract current demographic gaps and challenges.
"At Protección, we understand that closing the pension gap is a commitment to equity and economic security for all. We must stimulate the construction of individual savings as a key element to build a bridge towards a better retirement. Savings is not just a practice, it is the tool that empowers every Colombian to achieve their goals and ensure a financially secure future," explains Juan David Correa, president of Protección.
In this scenario, +Protección emerges as a dynamic and simple voluntary savings solution that allows anyone, regardless of their occupation or income, to access the complementary pension plan with a low monthly investment. This plan, supported by personalized investment advice, adapts contributions to life stages and individual financial goals, consolidating itself as an inclusive and flexible tool to ensure a stable financial future. To date, +Protección serves close to 50,000 clients.
Reform is necessary, but it must be done right.
"Colombia urgently needs a reform to its old-age protection system that adapts to the population's needs. While the pension reform project currently underway has positive aspects, it must be adjusted to achieve a reform that advances greater coverage, is more equitable and progressive by focusing subsidies on those Colombians who need it most and is viable for the country in terms of fiscal sustainability. It must also be a system based on savings, to address demographic transition and population aging, stimulating the development of the capital market," emphasizes Juan David Correa.
Many countries are adopting savings and capitalization pillars within their pension models as a mechanism to address the challenges of an aging population. In 1997, only 11 countries had a capitalization model, in 2021 the number rose to 28 countries, and in 2022 there are already 45 countries that have implemented capitalization processes.
"Our commitment to the financial well-being of Colombians is long-term, and today, around the ongoing pension reform project, we reiterate our responsibility to continue being champions of saving as the most sustainable path to guarantee the well-being of current and future generations, allowing them to design a retirement plan adjusted to the labor and demographic realities of our society," concludes Correa.
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About protección:
Protección S.A. is a company specializing in savings and investment, with 30 years of experience in managing resources totaling more than 130 trillion pesos from 8.3 million clients in Mandatory and Voluntary Pension Funds and Severance Funds, as well as more than 73,000 pensioners. The Company has transcended its category, energizing its business focus on managing assets destined for mandatory pensions and severance pay, to take it to the next level, which involves mobilizing and managing savings to be an ally of its stakeholders to accompany them in achieving their dreams and building their future.
