When it comes to planning the future, knowing the pension system is very important because you can see how the money is being managed while you are quoting.

To understand it, it is necessary to remember that there are two pension funds: the average premium (public) or the individual (private) savings regime. The first is a large system managed by Colpensiones where active workers pay the pensions of those who are already retired; while the private one is individual savings and each affiliate owns his account, and his money does not depend on others.

The Colombian Association of Pension and Severance Fund Administrators (Asofondos)  affirms that historically its profitability is superior to 8% real, and advises to save because the more you have voluntary contributions, the more significant the amount of the pension will be, and in this regime You will not depend on other people to reach your money.

Look at the different ways to secure fixed money for your future.

To find out where you are quoting, you can consult Old Mutual, Porvenir, Protección or Colfondos web pages which belong to the Association as mentioned earlier. Since many people do not know where they are affiliated, it is very likely that they do not understand what they do with that money while they can not use it.

Here we tell you what they did with it and their returns in 2018. First, it is good to know that the funds of the individual savings regime are companies that manage the resources of the members to increase their savings and make the pension much higher when you reach your old age.

When you are an affiliate you have the possibility of deciding how you want to invest your savings and achieve higher profitability, all this by the multi-fund scheme and you can choose according to your risk profile, your working time and age.

This change began its operation in 2012 through Law 1328 of 2009 because not before this a person of 20 years invested their contributions in the same fund as a person of 50 years despite their objectives and risks were different.

You maybe had no idea, but we tell you that you have several options to choose a pension fund that you have are: conservative fund , where people are already close to retirement age (10 years or less); Moderate fund which is recommended for members who are in the middle of their working life and who have a medium level of risk tolerance and finally the highest risk level, aimed at young contributors who are starting their working life and they still have many years ahead to get their pension — all of the above segmented according to the level of risk.

Some people have doubts about its profitability. However, Asofondos shows that the AFP managed to give their affiliates returns of more than $ 28.5 billion in the last two years.

“These figures confirm the benefits of the multi-fund scheme under which pension savings are managed, with benefits such as those observed in 2018 for the oldest members, in a situation of high volatility,” said Santiago Montenegro Trujillo, President Asofondos.

Where does this profitability come from?

Pension funds have rules to invest the resources of their members. In general terms, they can do so in private equity funds, highly liquid stocks, international market shares, CDT, among others.

According to the most recent information from:

The conservative fund had 78.98% invested in debt securities; the moderate fund invested 47.21% in this portfolio, unlike the higher risk fund, which was 67.54% in the equity securities market. That type of decisions, adopted by experts in investment issues of each AFP, is what makes the difference between one fund and another.

The diversification and variable investment of this private regime the long-term savings may have ups and downs, but the investment will always be much higher

 If you do not know how to obtain the pension affiliation certificate,