There is a figure that Colombia’s private pension funds prefer to keep out of circulation. Of the 527 trillion pesos they manage on behalf of Colombian workers, 257 trillion, nearly half, are invested outside the country, in international assets denominated in dollars. This is not an accounting anomaly or a market accident. It is the model. And while that money generates returns for fund managers and their institutional clients on the world’s financial markets, the Colombian state pays the pensions of 22,472 retired people from the national budget. The state assumes the liability. The private sector keeps the asset. A magistrate of the Council of State made sure things stayed that way. Nobody calls it by its name. But the mechanism works.
The window and what came through it
Law 2381 of 2024, the pension reform of Gustavo Petro’s government, created what became known as the opportunity window, a mechanism allowing people within ten years of retirement to transfer from the individual savings scheme, managed by private funds, to the public scheme administered by Colpensiones. Nearly 120,000 people used that window before the Constitutional Court suspended most of the reform in June 2025. Of those 120,000, just over 22,000 have already retired. They transferred, met the requirements, and Colpensiones began paying their monthly pension. But their savings, the money they had contributed for years and that should in theory have followed them, remained with the Administradoras de Fondos de Pensiones. The AFPs are holding on to it. And continue to invest it.
The government understood that the problem had two layers. The first was immediate, 22,000 already retired people whose savings remained in private funds while Colpensiones paid them with public money. The second was structural, the entire model, built on the premise that Colombian pension savings are better invested in international markets than in Colombia. To tackle both, it issued two decrees within thirteen days. On 7 April 2026, Decree 0369 ordered the AFPs to reduce their overseas investments from the current 49% to 30% over five years, which meant repatriating roughly 125 trillion pesos. On 20 April, Decree 415 ordered the immediate transfer of 25 trillion to Colpensiones, 20 trillion corresponding to transferred affiliates not yet retired and 5 trillion to those already drawing their pension. Law 100 of 1993, which remained in force after the partial suspension of the reform, was clear on this point, if a person transfers, their savings must follow. The timescales were short, between ten and twenty days. The urgency was not arbitrary. Every day of delay was a day in which Colpensiones paid pensions without receiving the assets to back them.
Colombia’s AFPs manage 527.3 trillion pesos in pension savings, of which 257.1 trillion, equivalent to 48.8% of the total portfolio, are invested in overseas assets. (Superintendencia Financiera de Colombia, 2026, cited in Decree 0369 of 7 April 2026)
The day Asofondos wasted no time
What happened next deserves careful reading, because speed matters in politics as much as in law. On 20 April 2026, the very day the government published Decree 415, the Colombian Association of Pension and Severance Fund Managers, Asofondos, filed a document with the Constitutional Court requesting that a precautionary measure be added to Auto 841 of 2025, the ruling that had blocked the reform, authorising the AFPs to disregard any government decree ordering the transfer of resources. The document arrived that same day at the office of magistrate Paola Meneses, president of the Court. One week later, on 28 April, magistrate Juan Enrique Bedoya Escobar, of the Second Section of the Council of State, provisionally suspended the 20 trillion corresponding to affiliates not yet retired. He did so under an urgent procedure and without prior notification to the government. Without waiting the five days that ordinary procedure allowed the state to respond.
Bedoya’s argument for the first suspension had some legal grounding. The pension reform had stipulated that resources from people transferring schemes should go into a Fondo de Ahorro del Pilar Contributivo, managed by the Banco de la República. That fund does not exist because the Court suspended the reform. Without it, the government could not order by decree that the money go directly to Colpensiones. It was, according to the claimants, a normative “leap into the void”. The debate over the 20 trillion therefore has some technical basis. What came next has rather less.
On 11 May, Bedoya extended the suspension to the remaining 5 trillion, those corresponding to the 22,000 pensioners already receiving their monthly payment from Colpensiones. Here the argument is weaker. These people are already retired. Colpensiones already carries the obligation. Law 100 is clear that if someone transfers, their savings must follow. And yet the Council of State said no. The decree was suspended in its entirety. Asofondos welcomed the decision. Its president, Andrés Mauricio Velasco, declared that the ruling “protects the pension savings of Colombians”. The private funds will continue managing that money. It will remain invested, in part, abroad.
A statement that does not read like one from magistrates
On 12 May, the Council of State published a statement in response to President Petro’s declarations, in which he had called the decision unconstitutional and announced a criminal complaint against magistrate Bedoya for alleged malfeasance in office. The document is strange. It does not read like the language of courts. It reads like the language of political parties.
Two details are enough to understand it. The first is that the statement uses the expression “Estado de Derecho” — Rule of Law — instead of “Estado Social de Derecho” — Social Rule of Law — which is what the 1991 Constitution says and what distinguishes a state that recognises social rights from one that merely guarantees legal order. This is not a drafting oversight. The second is that it accuses the government of exercising “excessive powers” without specifying which ones or presenting any evidence whatsoever. A high court that attributes authoritarianism to the executive in a press release, without proceedings, without a case file, without proof, has stepped out of its institutional role to occupy another.
Decree 0369 of 7 April 2026 requires the AFPs to reduce their overseas investments from 49% to 30% of the portfolio within five years, implying the repatriation of around 125 trillion pesos. Between 2027 and 2029, that adjustment would inject between 4.8 and 8 billion dollars per year into the Colombian market, a flow comparable to 71% of the country’s annual remittances. (Alianza Fiduciaria, analysis cited in Portafolio and Semana, April 2026)
What the mechanism produces
It is worth being precise about what is actually happening. Colpensiones is today paying the pensions of 22,472 people from the national budget because the private funds are retaining the savings that would back those obligations. Jaime Dussán, president of Colpensiones, confirmed that payments are guaranteed. There are funds available. But those funds come from the public purse, not from the individual savings of the pensioners, which remain in the hands of the AFPs. The Labour Minister, Antonio Sanguino, put it plainly, it is impossible to require Colpensiones to meet its pension obligations when the transfer of affiliates’ savings is refused.
And that retained asset, while it remains with the AFPs, continues to generate returns. Not for the pensioners already drawing their pensions. For the funds managing it. The AFPs collect commissions from contributions, not from returns, as Velasco of Asofondos himself explained. But the money remaining under their management produces returns that swell the portfolio. Every day of judicial suspension is another day in that equation. There is no need to look for a conspiracy where simply observing the incentives is sufficient. Asofondos responded to Decree 0369 by arguing that selling overseas assets in a hurry generates losses, that repatriated dollars would push up the value of the peso, and that there are not enough assets in Colombia to absorb that scale of investment. All of that may be true. It may equally be true that a business that has prospered for decades by investing the savings of Colombian workers in international financial markets has no structural interest in changing that model.
The complaint and its limits
Petro announced that his lawyer would file a criminal complaint for alleged malfeasance against magistrate Bedoya. Malfeasance in office, in Colombia, is the offence committed by a public official who issues a ruling manifestly contrary to the law. Proving it requires demonstrating not only that the decision was wrong but that it was consciously illegal. Council of State magistrates enjoy special jurisdictional privilege. A criminal case against Bedoya would not be handled by an ordinary prosecutor but by bodies that, as in all systems of judicial privilege, tend to protect their own. Petro knows this. What matters is not the outcome of the criminal proceedings but the principle they establish, that no public official, including a high court magistrate, stands above the law. The Council of State, with its statement of 12 May, replied with the exact opposite. That questioning them is inflammatory, that reporting them is harassment, that judging them is an attack on the separation of powers.
The separation of powers exists so that no branch of the state becomes the unchallengeable arbiter of its own conduct. When a high court uses that doctrine to shield itself from any scrutiny, it has inverted its meaning. What the Council of State claimed on 12 May was not judicial independence. It was impunity. And the difference between the two is not semantic. A branch of public power that protects the interests of big finance, that acts with urgency for the claimants but not for the state, and then publishes a political manifesto to justify its conduct, is not administering justice. It is exercising power. That this power benefits the private funds managing Colombian workers’ savings and investing half of it abroad is not a coincidence that deserves silence…
G.S.
Sources
- Colpensiones, fondos privados y reforma pensional: claves de la polémica por el traslado de 27 billones de ahorro, El Espectador, 13 May 2026
- Consejo de Estado frena todo el traslado de recursos que el Gobierno ordenó de fondos privados a Colpensiones, LaFM, 11 May 2026
- El Consejo de Estado frenó traslado de $5 billones de fondos privados a Colpensiones, La República, 12 May 2026
- Consejo de Estado frena por completo y de forma provisional el traslado de $25 billones a Colpensiones, El Colombiano, 11 May 2026
- Gustavo Petro estalló contra el Consejo de Estado tras freno del traslado de $25 billones a Colpensiones, Infobae, 11 May 2026
- Gobierno Petro expide decreto para limitar inversión de fondos de pensiones en el exterior, El Colombiano, 9 April 2026
- Analistas afirmaron que se podría generar una bonanza cambiaria si se limita la inversión externa de los fondos privados de pensiones, Infobae, 28 April 2026
- Pensiones en Colombia: ¿Hay riesgo para los afiliados tras freno a traslado a Colpensiones?, Portafolio, 13 May 2026
- Decree 415 of 2026, Ministry of Labour and Ministry of Finance, 20 April 2026
- Decree 0369 of 2026, Ministry of Finance, 7 April 2026
