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Comprehensive social security system

The purpose of this document is to provide a general description of the comprehensive social security system in Colombia.

In order to provide some clarity on the system and each of its subsystems that comprise it and thus contribute to the understanding that businessmen and other market players have of it.

What is the comprehensive social security system?

First of all, we will define the system as follows: this is a set of institutions, rules and procedures established by the State, which seek to guarantee the quality of life of citizens, based on the principles of solidarity, universality and efficiency, what we know today as the Comprehensive Social Security System seeks to protect its members from contingencies that may undermine their health and economic welfare.

Components of the comprehensive social security system

It is also necessary to describe the components of this comprehensive social security system, which seek to safeguard specific risks that people experience, thus, we speak of the health system, the occupational risk system and the pension system, which in turn refer to the following protections, first to ensure the protection of the right to health that people have, thus taking care of their physical and psychological health, and as established by the decree 2353 of 2015 This protection starts with prevention and promotion, diagnosis, treatment, integral rehabilitation and even palliation, secondly it promotes good habits and resources that guarantee safety and health in the work environment and finally it protects the old age, disability and death of the creators of economic resources of a family, in which case a survivors’ pension can be paid.

For this purpose, it is necessary that each legal labor or civil relationship in force in the Colombian market must contribute to the integral social security system, in different forms and proportions:

Contributions to the health system 

the total contribution to be made is 12.5% and, depending on whether the worker is dependent or self-employed, he/she must contribute as follows

In the case of dependent workers

In other words, if they are under an employment contract, the employer will have to respond or contribute 8.5% while the worker will only have to contribute 4%.

For self-employed workers

 Whether they are under a service contract or are self-employed or if it is the case of the capital annuitant, they must contribute the total of 12.5%, being responsible for 100% of the same.

It should be noted that the non-payment of contributions may generate a delay, which could lead to a suspension of services and if it is proven that the employer is responsible for the delay, this could result in a liability to the employee due to the obligation to guarantee the provision of the health service to which he/she is entitled.

Contributions to the labor risk system

 The contributions to the labor risk system depend on the economic activity developed by the employer and how risky it is, hence, unlike the EPS and the pension fund administrator, it is the employer who chooses which risk administrator to enter his workers.

Contributions to the labor risk system are divided into levels from (I to V), which range from 0.522% (level I) to 6.960% (level V).

Similarly, the non-payment of contributions or the non-affiliation of workers can generate serious sanctions for an employer, from being subject to fines by the control entities to being charged with employer’s fault, which is enshrined in Article 216 of the CST and contains the possibility of the employer being sued for all damages caused by the employer’s negligent actions.

Contributions to the pension system

 For the general pension system, the total amount to be contributed is 16%, where 12% is always in charge of the employer, while the worker contributes 4%; additionally, when the IBC is higher than or equal to 4SMLMV, he/she must also contribute to the pension solidarity fund, which has a minimum contribution of 1% up to 2% and, as in the case of health, when they are independent workers, they must cover 100% of the amount contributed.

It is important to remember that there are two pension systems, to which the dependent or independent worker, based on the principle of free choice, has the full capacity to choose which one to join and start making contributions to:

RPM (Average Premium with Defined Benefit Scheme)

 Or also known as the public regime that is administered by COLPENSIONES.

RAIS (Individual Savings Regime with Solidarity)

 which are managed by private legal entities and are known as pension fund administrators, which in the case of the RAIS there are a variety to choose which one to belong to.

Similarly, as we have already given as examples some consequences when employer obligations are not complied with, as is the case of the affiliation and payment of contributions to the social security system, it is also the case in pensions, that the non-affiliation can generate that the employer is responsible for the payment of the benefits to which the worker involved was entitled, This was the case of the well known sanction pension, which through a judicial decision, established the obligation of the employer to respond directly for the payment of the pension to the worker who was not affiliated during his entire working life and as a consequence of the same could not access a pension for the protection of his old age, disability or death.

It should be clarified that these payments are made through technological systems that are approved by the competent authorities, the so-called “PILAS” (integrated contribution liquidation spreadsheet), in which all the news of a worker is entered, from its entry until its retirement and the corresponding payments to be made for social security.

This is why it is extremely important to make the social security contributions in the times and amounts established by the law and its corresponding regulatory decrees, since the non-affiliation or delay in the same can bring for the employer a series of sanctions that can have a serious economic impact for their companies and negative repercussions for the same.

At the same time, there is a control entity over this system, called the Pension and Parafiscal Management Unit, known by its acronym (UGPP), which is focused on the supervision, investigation, inspection and sanction of all those cases that represent non-compliance with the regulations governing the entire system, In addition, among other functions, it is responsible for the payment of pensions caused or to be caused by public institutions or entities that have been declared in liquidation, in addition to some transitory functions entrusted to this special unit due to the contingency by the COVID-19.

It is also important to mention that the handling of these matters can be complex, based on this it is important to rely on various professional experts in the field, to ensure that in practice everything is carried out in the best possible way.

Authors:

Santiago PinzĂłn Sosa

Luisa MarĂ­a Zapata Herrera

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