General pension system and minimum old-age pension In Colombia: estimates of accumulated capital using Geometric gradients Sistema General de Pensiones y pensión mínima de vejez en Colombia: estimaciones de capital acumulado utilizando gradientes geométricos

Abstract

The legal framework governing the General Pension System (GSP) in Colombia, provides that an affiliate manages to acquire the right to minimum old age pension when reaching the age pension (57 years old/female, 62 years old/male), has achieved contribute to the system 1300 weeks during the accumulation period, being a legally valid condition for either existing regulations (rpm and rais). On the other hand, empirical evidence shows that there is a wide gap between capital and accumulated quoted by an affiliate and capital requirements necessary to satisfy the pension law in the period of enjoyment; situation is closely related to the life expectancy of pensioners. This article aims to estimate using the methodology of geometric gradients quoted times, accumulated savings balances and interest rates required to achieve sufficient capital to satisfy a minimum pension for different periods of life expectancy.