This Asinta market guide makes understanding the market norms for employee benefits in Colombia easy. It also includes typical benefit design & cost for mandatory and common, supplementary benefits. The following is an example of what’s inside.
A Legislative Overview for Colombian Benefits
Law 100 of 1993 brought an end to the monopoly of the Social Security Institute (Instituto de Seguros Sociales – ISS) and thereby substantially altered the future prospects for private providers in the fields of pensions, general health and maternity, and workers’ compensation. Between that date and final closure of the ISS in 2012 it continued to operate in parallel, and sometimes in competition, with private sector entities.
The current law mandates:
- Pensions — The state body is Colpensiones, and there are a number of private sector pension fund administrators (AFPs)
- Healthcare — The state body is Nueva EPS, and there are many private sector health promotion companies (entidades promotoras de salud – EPSs)
- Workers’ compensation — This is handled by the state life insurance company Positiva, or duly authorized private sector life insurers, which usually form separate companies or units known as labor risk administrators (administradoras de riesgos laborales – ARLs).
Article 87 of Law 1328 of 2009 provided for ‘periodic economic benefits’ (beneficios economicos periodicos or BEPs), a plan with an element of government subsidy for those who do not qualify for the minimum pension.
Employees may receive other benefits such as severance pay, holiday premiums, transportation subsidies, and family allowances. However, these are financed and regulated outside the social security system.
Scope of Coverage
All employees are obliged to be affiliated to one of the state schemes or a private sector equivalent. The social security system aims to cover the whole population without any discrimination. The goal is that the beneficiaries now include not only those affiliated, but also all their economic dependents in the nuclear family. There are two forms of affiliation; contributory by all employees and the self-employed, and subsidized membership for those who are unemployed, or who are amongst the many poor in rural or urban areas.
If you have further questions about market norms for employee benefits in Colombia, please contact us and we will put you in touch with Correcol, Asinta’s employee benefit consulting Partner in the country.