Colombia's Constitutional Court approves most of Petro's pension reform

Colombia's Constitutional Court has approved the majority of former President Gustavo Petro's landmark pension reform, a decision that clears the path for significant changes to the country's retirement system. The court's ruling, decided by seven votes to one, ends over two years of uncertainty surrounding the "Law 2381 of 2024." However, several sections of the reform were sent back to the Chamber of Representatives for correction due to procedural issues during legislative debate.

Petro, who served from 2022 to 2026, hailed the decision as a victory for "the government of change and the working people," noting that only the health reform now remains among his administration's key initiatives. The approved pension reform introduces a four-pillar structure: a solidarity pillar for the impoverished elderly, a semi-contributory pillar for those who contributed but fell short of pension requirements, a contributory pillar for most contributions, and an individual savings pillar that includes private funds.

A central change mandates workers to contribute income up to a certain threshold to the state-run Colpensiones fund. Income exceeding this limit can be directed to private individual savings accounts. The reform maintains current retirement ages: 57 for women and 62 for men, with a 16% contribution rate.

The court's approval does not mean the new system will be implemented immediately. The original effective date of July 1, 2025, has passed. The tribunal has set a new start date of April 2027, allowing time for the sections returned to Congress to be finalized. The government must also issue regulations, and entities like Colpensiones and private funds need to adapt their systems.

Additionally, the ruling leaves pending appeals from affiliates who used an "opportunity window" to switch pension regimes. Over 27 trillion pesos (approximately $8.44 billion) are tied to these transfers, which remain subject to legal processes. The decision represents a significant win for Petro's legacy, but it also sets the stage for potential political shifts, as current president Abelardo de la Espriella has signaled intentions to pursue a counter-reform.