(Bloomberg) -- Colombia’s private pension fund association Asofondos said that more than a million clients would be exempt from a 0.7% management fee passed by the senate last week. 

The text of the bill says the fee will be levied on the “total of assets under management,” which amount to $104 billion. 

However, Asofondos said that its understanding is that Colombians who have already retired, or who are close to retirement, would be excluded from this. This would cut the total of assets on which the fee would be charged to $49 billion, the group said in a statement.  

Under current rules, Colombians pay an upfront levy on contributions to these funds, but nothing thereafter. Asofondos said the new charge would offset the sector’s revenue loss when the majority of worker contributions are automatically directed to the public system. 

Read more: Pension Bill Tweak Means a Bonanza for Colombian Fund Managers

About 19 million Colombians are affiliated with the private pension funds. The text didn’t specify over what period the new fee will be levied, though fund management costs are conventionally quoted in annual terms.  

Labor minister Gloria Ines Ramirez has said she expects the senate to approve the full text of the pension reform on Monday after which the bill will be discussed in the lower house.

©2024 Bloomberg L.P.