Pension Bond in Colombia: What It Is, Who Is Entitled to It, and How to Process It

What is a pension bond and how does it work in Colombia?

If you worked or contributed to the public sector or the former ISS (Social Security Institute) before moving to a private pension fund, your weeks were not lost. In the Colombian pension system, the pension bond is a security issued by the Nation or by public entities/employers that represents in time and money the contributions made before changing pension regimes.

Contrary to what many believe, the pension bond is not a state subsidy or a check that you receive in your bank account to spend freely. It is a financial guarantee that is liquidated in your favor and whose capital goes directly into your Individual Savings Account (CAI) at your Pension Fund Administrator (AFP), such as Porvenir, Protección, Colfondos, or Skandia, or to the common Colpensiones fund to finance your retirement pension.

Requirements to be entitled to a pension bond: The 150-week rule

Not everyone who changes pension regimes automatically receives a pension bond. The Colombian State establishes precise mathematical criteria for its issuance in order to avoid the creation of administrative micro-securities.

To be entitled to a Type A Pension Bond (the most common among members of private funds), you must mandatorily meet the prior contribution threshold:

• Minimum of 150 contributed weeks: You must prove at least 150 weeks of contributions (equivalent to approximately 3 continuous or discontinuous years) in the former ISS or public social security funds before making your transfer to the individual savings regime.
• Time in the public sector: Time worked in State entities that directly assumed the pension reserve for their employees before Law 100 of 1993 came into effect also applies.
• Mandatory military service: Time served in mandatory military service is legally recognized and counts towards reaching the 150-week threshold.

What happens if you contributed fewer than 149 weeks before transferring? In these cases, you do not lose your money, but a formal pension bond is not issued. The transaction is resolved through an actuarial calculation for omission or refund of contributions, where the contributed money is brought to present value and deposited into your individual account without going through the bond issuance and redemption procedures.

Types of pension bonds in Colombia

The Ministry of Finance and Public Credit, through the Pension Bond Office (OBP), classifies these instruments according to the entity of origin and the affiliate's destination regime:

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Step-by-step process for processing the pension bond

The pension bond process does not require intermediaries or paid agents. It is a 100% free process that your pension administrator (AFP) is legally obligated to carry out on your behalf.

Step 1: Verification of work history

Between 6 and 12 months before reaching retirement age, request your consolidated work history from your AFP or Colpensiones. Carefully review each company, dates of entry and exit, and reported salaries. If you worked in public or defunct companies, this is the time to request corrections for missing weeks.

Step 2: Issuance of the CETIL certificate

To certify time worked in State entities, traditional letters or physical formats are no longer accepted. Validation must be performed using the CETIL System (Electronic Certification of Time Worked), a digital platform managed by the Ministry of Finance and the Ministry of Labor. Your AFP directly requests the CETIL from the corresponding public entity, which has a legal deadline of 15 business days to issue the digital certificate free of charge.

Step 3: Provisional liquidation and signature of the member

With the work history validated and the CETIL certificates uploaded, the AFP requests the provisional liquidationfrom the Pension Bond Office (OBP) of the Ministry of Finance. This liquidation calculates the value of the bond by applying IPC update formulas plus a real return of 3% or 4% per year (depending on whether you transferred before or after December 31, 1998). The AFP must show you this calculation for you to review and sign the compliance letter along with your ID card.

Step 4: Issuance and redemption

Once the liquidation is accepted by the member, the issuer has a legal period of up to 3 months to formally issue the pension bond (a period that is reduced to 45 days in cases of disability or survivor benefits).

Pension bond redemption ages

The pension bond becomes liquid (it is redeemed) when the member reaches the age or conditions set by Law 100 of 1993:

• Normal redemption: The normal redemption age for the Type A Pension Bond is 57 years for women y 62 years for men. On that date, the value of the bond is effectively transferred to the member's account at the AFP to support the old-age pension.
• Early redemption: This occurs immediately in cases of disability pension (loss of work capacity equal to or greater than 50%), death of the member to finance the survivor's pension, or when the capital accumulated in the CAI plus the discounted value of the bond is sufficient to finance a pension greater than 110% of the SMMLV.

Frequently asked questions

❓ What is a pension bond in Colombia?

It is a security representing the monetary value of contributions made to the ISS or the public sector before switching pension regimes. It is issued by the Nation or public entities/employers, and the capital goes to the CAI or the Colpensiones fund, not as a cash check, according to the Ministry of Finance (consulted source).

❓ Who is entitled to a Type A Pension Bond?

Those who contributed at least 150 weeks (3 years) to the ISS or public pension funds before moving to a private fund are entitled. The weeks can be continuous or discontinuous; anything below that threshold does not generate a formal bond, according to Colpensiones (consulted source).

❓ What is the difference between a Type A Bond and a Type B Bond?

Type A is issued for members of private funds (RAIS), and Type B finances pensions for Colpensiones (RPM). Type T covers transition differentials toward Colpensiones for public service time, according to the OBP of the Ministry of Finance (consulted source).

❓ At what age is the pension bond paid or redeemed?

The standard redemption for Type A is at age 57 for women and 62 for men. That capital is transferred to your pension account, not your bank account, upon reaching the retirement age under Law 100 of 1993 (source Decree 1748 of 1995).

❓ What is the CETIL certificate and why is it mandatory?

CETIL is the Ministry of Finance's electronic system to certify time served and salaries in the public sector. It replaces paper forms; your AFP requests it from the entity, and physical letters are no longer valid, according to the Ministry of Finance (consulted source).

❓ Does the employee receive the pension bond money in their personal bank account?

No: the money goes into the AFP's CAI or the Colpensiones common fund to calculate the monthly pension payment. A different payment only occurs as a refund of balances if pension requirements are not met, according to Colpensiones (consulted source).