UPDATE 1-Colombia high court temporarily suspends decree on pension transfers

Colombia's top administrative ​court suspended a government ​decree that required private pension ‌funds to ​transfer some 25 trillion pesos ($6.1 billion) to the state-run administrator Colpensiones, according to a court ‌ruling on Tuesday.

The decree, issued on April 23, mandated that private funds transfer the balances of individual savings accounts for workers who transitioned to the ‌public system under a 2024 reform law within 30 days. The court's ‌decision is a blow to President Gustavo Petro's administration and comes as the broader pension reform undergoes a legality review by the Constitutional Court. That review follows allegations ⁠of ​procedural irregularities during ⁠the law's approval in Congress.

Industry analysts and trade associations have raised concerns that the ⁠government intends to use these resources to finance public spending amid a significant ​fiscal deficit. The government is reportedly seeking to increase domestic investment in ⁠government bonds, known as TES. Private pension funds are currently the second-largest holders of TES, ⁠which ​serve as a primary source of domestic financing for the Colombian government after tax revenue.

The suspension follows a separate April ⁠decree from the Ministry of Finance that capped foreign investments by private pension funds ⁠at 30%. The ⁠administrative court's ruling arrives as Petro enters the final stretch of his four-year term, which is set ‌to end ‌in August.

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