The Colombian government presented yesterday, through the Ministry of Finance, a draft decree that would modify the investment regime of mandatory private pension funds to repatriate a large share of the resources invested abroad.
The initiative, which will be open for public comment until Feb. 4, proposes that private pension funds may invest abroad only up to 30% of their affiliates’ pension resources. The remaining 70% must be invested domestically in strategic sectors of national production.
In this way, it establishes that the current investments of pension fund administrators (AFPs) must gradually return a significant portion of their investment to the country, a move that has sparked intense debate among authorities, experts, and technical sectors of the financial and pension system.
By the end of 2025, nearly 49% of these funds were held in international assets abroad, which would imply, if the measure is approved, a significant return of capital. According to the government, to facilitate this adjustment without abruptly disrupting financial markets, a transition regime of up to five years was designed, with an intermediate cap of 35% three years after the rule enters into force.
The rest of the resources would be channeled into priority projects within the country, including strategic sectors such as infrastructure, construction, and other areas that, according to the government, have high potential to impact growth in Gross Domestic Product (GDP).
Colombia moves to repatriate overseas pension funds by decree
The government says that the move responds to the need to boost domestic investment and to leverage the long-term savings managed by AFPs to advance projects with multiplier effects on the real economy.
In the explanatory memorandum of the document, it is argued that national investment and savings levels are insufficient to finance the country’s development needs and that capital repatriation would help close that gap.
In this sense, the regulation seeks to align Colombian workers’ institutional savings with the country’s structural requirements, especially in areas that directly affect infrastructure and economic productivity.
Beyond the technical arguments, the measure is also presented as a response to the executive branch’s concerns over the low level of domestic savings relative to the size of the economy. Figures from the third quarter of 2025 show that investment accounted for less than 20% of GDP, while savings stood at around 8%, according to data from DANE cited in the text of the decree.
The government has insisted that redirecting resources previously available in external markets toward local opportunities can foster greater financing for productive projects and, in turn, stimulate overall economic activity.
The proposal has triggered mixed reactions across economic and financial sectors. Representatives of the AFPs themselves and associated trade groups have expressed concerns about potential adverse effects on fund returns and portfolio diversification. For many analysts, international exposure is a key factor in risk management and return generation, so a forced reduction could limit these investment vehicles’ ability to balance risks and returns.
Likewise, some experts have pointed out that forcing capital repatriation could generate tensions in international and local markets if not handled carefully. The need to protect the liquidity and profitability of affiliates’ savings is at the center of the criticism, under the argument that excessive regulatory rigidity could translate into lower future pensions or less efficient investment structures.
The Office of the Attorney General (Procuraduria General de la Nacion) has also announced a role of preventive oversight of the project, underscoring the importance of rigorously assessing the legal and financial impacts of the rule before its final adoption.
Gobierno publica para comentarios proyecto que busca fortalecer inversión productiva y mercado local de capitales. #EconomíaParaTodos@petrogustavo pic.twitter.com/fke07P8Zrj
— MinHacienda (@MinHacienda) January 21, 2026
What does the government’s draft say?
The draft states that the Ministry of Finance “may promote the creation of an investment project bank with a productive focus through any of the admissible assets of the investment regime of mandatory pension funds.”
The document notes that one of the objectives of the proposed decree is to “enable new investment opportunities nationally, especially those aimed at the development of productive projects in sectors with high economic multipliers, such as infrastructure and construction, which have the potential for a positive impact on GDP above the average multiplier of the economy.”
Another of the draft’s considerations notes that, according to data from DANE, investment levels in the third quarter of 2025 represented 19.7% of GDP and savings levels 8% of GDP, “which highlights the need to promote an increase in national savings to efficiently finance the country’s investment needs. In this context, it is necessary to adopt measures so that national savings increase and are invested in the country.”
Article One of the draft decree sets a global limit of 30% on investment abroad, applicable to the sum of the four types of mandatory pension funds: conservative, moderate, higher-risk, and special programmed withdrawal.
However, to comply with the decree, a transition regime is established: mandatory private pension funds will have a maximum period of five years to meet the global limit on investment in foreign assets. Nevertheless, a gradual implementation scheme with an intermediate threshold is foreseen: 35% by the third year, and 30% by the fifth year.
The explanatory memorandum of the document states that, as of Nov. 30, 2025, “the total resources managed by mandatory pension funds amount to 527.3 trillion pesos (approximately US$142.51 billion), of which 257.1 trillion pesos (approximately US$69.5 billion) correspond to investments in foreign assets, equivalent to approximately 48.8% of the total aggregated portfolio,” and clarifies that the administrators of these funds comply with individual limits on foreign investment, “which shows that the proposal does not stem from a scenario of noncompliance, but from a prudential adjustment of an aggregate nature.”
That is, over five years, the Ministry of Finance and Public Credit aims to repatriate around 125 trillion pesos (approximately US$33.8 billion) of pension resources invested abroad by private funds.
Political debate and immediate expectations
The project arrives at a time when the economic policy of President Gustavo Petro’s government is facing broad scrutiny both inside and outside Colombia, due to rising public debt and the lack of consensus to pursue political solutions to curb the escalation of debt.
The proposal to repatriate pension resources is part of a broader debate on the role of institutional savings in national development and the balance between state regulation and the free market.
From the executive branch, they have emphasized that the transition to the new limits will be gradual and technical, with the intention of ensuring the sustainability of the pension system and promoting a balanced investment model that combines security, profitability, and social responsibility.
In addition, the draft decree establishes a set of “strategic projects of national interest” ranging from the electrification of urban public transport to domestic production of pharmaceutical products to guarantee supply — amid a sector-wide crisis — along with measures such as the construction of a network of high-complexity hospitals, a railway reactivation plan, and structural improvements in the education system.
As the public comment period progresses, the future of the decree and its possible adjustments remains uncertain. The response of investors, AFPs, and technical bodies will be key in determining whether the final version of the rule maintains the proposed parameters or introduces significant modifications to ease the concerns raised.
It also remains to be seen how oversight and compliance evaluation mechanisms for the new investment limits will be articulated, as well as how safeguards will be incorporated to protect affiliates from potential negative impacts.
The debate over the repatriation of private pension funds reflects deep tensions in how Colombia seeks to balance its development objectives with the protection of individual savings and the stability of the financial system.
In the coming months, the country will continue to closely watch this debate and the decisions adopted by its political and technical leadership around one of the most controversial reforms on the recent economic agenda.