Decree 488, issued on March 27, 2020, authorized individuals who have their severance funds deposited in any of the Private Pension and Severance Fund Management Companies in the country to withdraw a specific amount from the respective fund each month, in order to mitigate the economic impact suffered by workers due to the adoption of preventive health measures of isolation and quarantine, in connection with the Coronavirus COVID-19, to prevent its contagion and spread.
Now, in accordance with Article 3 of the aforementioned Decree, only workers who have experienced a decrease in their monthly income, duly certified by their employer, will be beneficiaries of this prerogative, and they may only withdraw from their severance fund the amount that allows them to compensate for the reduction in their salary, limiting such value to the available balance in their severance account. Likewise, individuals who have become unemployed may withdraw once a month the money they received as salary for the duration of the contingency, proportionally to the amount saved in the respective fund, and must provide the employer's certificate.
In line with the foregoing, the Financial Superintendence of Colombia, through External Circular No. 013 of 2020, indicated that the certificate issued by the employer referred to in Article 3 of Decree 488 of 2020 must contain the following information:
- Name or corporate name of the employer.
- Employer's identification number.
- Worker's first and last names, along with the type and number of identification.
- Employer's contact information.
- Salary earned by the worker as of March 1, 2020.
- Amount by which the worker's monthly income decreased.
Such certificate may be used for all monthly severance withdrawal requests authorized by the aforementioned legislative Decree, and it may be updated in the event of a change in circumstances.
Likewise, Pension and Severance Fund Management Companies must enable digital and/or remote channels to facilitate the request, approval, and payment of severance withdrawals, such as websites, call centers, mobile applications, among others. In that sense, these entities will publish on their websites the digital and/or remote channels available to carry out the severance withdrawal procedure.
However, it is important to clarify the temporary nature of the measure, since workers will only be able to access the prerogatives granted by Decree 488 of 2020 as long as the events that gave rise to the declaration of Economic, Social, and Ecological Emergency persist.
Author: Manuela Rodriguez A. Consulting Attorney at AZC