The National Government published Decree 1207 of 2020 defining the Voluntary Pension Funds as a mechanism or vehicle for the collection or administration of sums of money or other assets, integrated with the contributions of the participants and sponsors and their earnings, to be managed collectively and to obtain collective economic results, in order to comply with one or several retirement and disability pension plans. In accordance with the objectives set forth by the Capital Market Mission, this new decree closes regulatory gaps and opens the door for the creation of investment vehicles with greater freedom in terms of investment policies, offering the public new alternatives and investment opportunities for the management of pension resources.
These voluntary pension funds may be administered by trust companies, by pension and severance fund management companies and insurance companies, which must at all times have suitable staff, capacity and infrastructure for the proper administration of these vehicles. Likewise, the new rule stipulates that the administration companies may only receive as a benefit of their management a variable or fixed commission that must comply with the provisions of the Decree.
Similarly, voluntary pension funds must have an operating "Reglamento" that, in addition to incorporating the content required by the Decree, must clearly establish the investment policy. In this respect, it is noted that these vehicles may invest in any asset or right of economic content, including those acceptable to collective investment funds. This last provision is of great relevance to the public, since this new regulatory framework will allow the design of investment structures that fit the needs of each individual investor. In other words, it opens the door for savers to be able to invest their resources in tailormade vehicles, generating an opportunity for dynamism in the local market. Thus, investors will have greater freedom and opportunities to allocate their pension savings to funds with investment policies and risks of various kinds and categories.
Likewise, the regulations detailed that in the event of insolvency proceedings or liquidation of the sponsoring entity or of any of them when there are several, the liabilities to the Voluntary Pension Funds will be subject to the regime of labor liabilities.
The implementation of a voluntary pension fund will require the prior approval of the Superintendence of Finance, for which the management company must submit the documentation set forth by the Decree.
Finally, the Decree establishes that the Superintendence of Finance will have a term of four (4) months to issue the general instructions necessary to comply with the provisions of this new regulation.
See full text of Decree 1207 of 2020