Colombia Lifts 30% Cap on Pension Funds’ Foreign Assets
COLOMBIA · MARKETS
Key Facts
- —The country Colombia’s mandatory private pension funds held about US$172 billion in July.
- —What happened Decree 1490 of Tuesday, 6 October, repeals the 30% foreign-asset cap.
- —The numbers Funds held 44.5% abroad, about US$77 billion, at end-July.
- —The US angle Dollar holdings reached US$72.5 billion, up US$5.7 billion since March.
- —What it means for you No forced shift home; funds can keep buying dollar assets.
- —Still open How fast funds add foreign assets now the ceiling is gone.
A rule that would have steered Colombian pension savings home is gone, keeping a large buyer of dollar assets in the market.
Colombia pension funds no longer face a 30% cap on the share of savings they may invest abroad. The government repealed the limit by decree on Tuesday, before it had changed how the funds invest, the Finance Ministry says.
For US markets, the change keeps in place a buyer that held US$72.5 billion in US-dollar assets at the end of July. Under the cap, that pool would have grown more slowly as new contributions went into Colombian assets.
What Decree 1490 Changes
Decree 1490, dated Tuesday, 6 October, was issued by the Ministry of Finance and Public Credit and posted on its website. It repeals three articles added in April by Decree 369 to Decree 2555 of 2010, the financial sector’s main rulebook.
Those articles set a global 30% ceiling on foreign assets across the four mandatory fund types. Funds had to cut exposure to 35% within three years and 30% within five, mainly by putting new contributions into local assets.
Fund managers also had to file adjustment plans with the Superintendencia Financiera, the financial regulator, by 7 October. The regulator told the ministry that none had done so as of 7 September.
The board of the ministry’s financial regulation unit approved the repeal at an extraordinary session on Thursday, 1 October. El Tiempo, the Bogotá daily, reported that the decree took effect on Wednesday, 7 October, a day after its publication.
Why the De La Espriella Government Dropped the Cap
The cap was a policy of leftist former President Gustavo Petro, whose government wanted more pension savings invested in Colombia. Conservative President Abelardo De La Espriella, in office since August, published a draft repeal on 10 September.
Finance Minister Miguel Gómez Martínez said the change protects the savings of Colombians. “Those resources do not belong to the fund managers; they belong to the workers,” he said, according to La República.
The decree says the cap upset the balance between risk and return, raising risk and lowering expected returns. The ministry’s technical memo, in an illustrative model, estimated it cut long-run expected returns from 6.80% to 6.26%.
The pension reform also changed the arithmetic. The Constitutional Court upheld most of the 2024 reform, Law 2381, on 25 August, with effect from 1 April 2027.
The government estimates that workers in the reform’s transition regime hold about 45% of the private system’s money. That shrinks the base the cap would have applied to, the decree says.
How Much Money Colombia Pension Funds Hold Abroad
Mandatory pension funds held COP 557 trillion (about US$172 billion) on 31 July, according to ministry figures based on regulator data. Of that, COP 248 trillion (about US$77 billion), or 44.5%, was invested abroad.
That foreign share was 48.4% at the end of March, before the cap took effect. The ministry says a stronger peso caused the drop, not selling.
The funds’ US-dollar holdings in fact grew by US$5.7 billion between March and July, to US$72.5 billion. Euro assets were a distant second, at COP 11.5 trillion (about US$3.5 billion).
At July values, a 30% share would have meant shifting about COP 81 trillion (about US$25 billion) into Colombian assets. When the cap was drafted in January, Forbes Colombia estimated more than COP 120 trillion (about US$37 billion) would return home.
Conversions use the official TRM exchange rate of 3,238.88 pesos per US dollar for Thursday, 8 October. The Superintendencia Financiera certifies that rate each day.
What It Means for You
For US asset managers and markets, the decision keeps a steady buyer of dollar assets in place. Colombia pension funds kept adding dollar holdings even while the cap was in force, the ministry’s data show.
For the peso, the repeal removes planned demand: new contributions would have gone into peso assets, not dollars. The official rate for Thursday rose to 3,238.88 pesos per dollar from 3,216.01, a peso about 0.7% weaker.
None of the local reports on the decree linked that move to it. The peso is still about 3% stronger than at the end of September, on the same official rate.
Asofondos, the fund managers’ trade group led by Andrés Velasco, welcomed the repeal as a boost to diversification. Velasco said a wider margin helps manage risk and find returns for Colombian workers, La República reported.
What Is Not Known
The decree sets no new target for foreign assets. How fast fund managers will raise foreign holdings, if at all, is not known.
Official portfolio figures after 31 July were not in the published documents. The decree also does not restate the older fund-by-fund limits that still apply.
What Comes Next
The 2024 pension reform takes effect on 1 April 2027, splitting future contributions between the old and new rules. The ministry says specific prudential limits and the managers’ own risk controls will keep protecting workers’ savings.
The repeal does not order any money abroad. It removes a ceiling that, by the ministry’s own account, had not yet changed how the funds invest.
Frequently Asked Questions
What did Colombia change for its pension funds?
Decree 1490 of 6 October removed a 30% cap on assets held abroad by mandatory private pension funds. The cap had been set in April and was due to phase in over five years.
How much money do Colombia pension funds hold abroad?
They held COP 248 trillion (about US$77 billion), or 44.5% of assets, at the end of July. US-dollar holdings alone were worth US$72.5 billion.
Why does this matter to US investors?
The funds are steady buyers of dollar assets. Without the cap, they no longer have to steer new money away from those markets.
Did the decree move the Colombian peso?
The peso weakened about 0.7% on Wednesday, based on the official rate. None of the local reports on the decree linked the move to it.
Who made the decision?
President Abelardo De La Espriella’s government issued the decree through the Finance Ministry. The ministry’s financial regulation unit approved it on 1 October.
Sources: Ministry of Finance and Public Credit, Decree 1490 of 6 October 2026; Ministry of Finance and Public Credit, draft decree and technical memo (10 September 2026); Ministry of Finance and Public Credit, Decree 369 of 7 April 2026; Presidency of Colombia; Superintendencia Financiera, official TRM exchange rate; El Tiempo; La República; El Espectador; Forbes Colombia (all accessed 8 October 2026).
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief
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