Regulation on Transfer Between Pension Fund Administrator Institutions

DE No. 27/2006
DECRETO No. 27/2006
REGULATION ON TRANSFER BETWEEN PENSION FUND ADMINISTRATOR INSTITUTIONS Approval: 13/03/2006 Validity: 03/05/2006

DECRETO No. 27.

THE PRESIDENT OF THE REPUBLIC OF EL SALVADOR,

CONSIDERING:

I. That by Legislative Decree No. 927, dated December 20, 1996, published in the Official Diary No. 243, Volume No. 333, dated the 23rd of that same month and year, the Pension Savings System was created for workers in the private, public, and municipal sectors, which comprises the set of institutions that will administer the resources destined to pay the benefits to be recognized to affiliates to cover the risks of Common Disability, Old Age, and Survival;

II. That Art. 12 of the Law of the Pension Savings System establishes the conditions for the voluntary transfer of affiliates between Pension Fund Administrator Institutions, which constitutes one of the rights they have in the system;

III. That by Executive Decree No. 119, dated November 11, 1998, published in the Official Diary No. 231, Volume No. 341 of December 10 of that same year, the Regulation on Transfer Between Pension Fund Administrator Institutions was issued;

IV. That by Legislative Decree No. 891, dated December 9, 2005, published in the Official Diary No. 238, Volume No. 369, of the 21st of that same month and year, Art. 12 of the Law of the Pension Savings System was reformed, regarding the operationality of transfers.

THEREFORE,

in exercise of its constitutional powers,

DECREES the following:

REGULATION ON TRANSFER BETWEEN PENSION FUND ADMINISTRATOR INSTITUTIONS

CHAPTER I
GENERALITIES

Object
Art. 1.- The object of this Regulation is to regulate the process of transferring affiliates between Pension Fund Administrator Institutions.

Designations
Art. 2.- In the text of this Regulation, the following abbreviations and designations will be used:
AFP: Pension Fund Administrator Institution;
Agent: Pension Services Agent;
CIAP: Individual Pension Savings Account;
HL: Affiliate's Work History;
Law: Law of the Pension Savings System;
Book: Transfer Book;
NUP: Unique Pension Number;
SAP: Superintendence of Pension Savings;
Superintendence: Superintendence of Pensions;
Regulation: Regulation on Business Management of Pension Fund Administrator Institutions.

Definitions
Art. 3.- In the text of this Regulation, the following definitions will be used:
a) Accreditation: It is the process by which the contributions made to the fund by the affiliate and their employer are assigned to the holder of the CIAP, according to what is established in the Regulation on Collection of Contributions to the Pension Savings System; b) Destination AFP: That AFP to which the worker wishes to transfer; c) Origin AFP: That AFP in which the worker is affiliated at the moment they request the transfer; d) Days: Calendar days, unless it is expressly stated that they are business days; e) Transfer Book: Book authorized by the Superintendence, in which the signature, fingerprint, and relevant data of workers who wish to transfer to an AFP different from the one in which they are affiliated will be recorded. The book is the property of each AFP; it is responsible for its management and control; f) Backlog: Pension contribution of a worker paid to a Pension Institution different from the one to which the worker is or was affiliated in the period corresponding to the contribution.

Generalities
Art. 4.- The transfer of an affiliate is generated when they decide to voluntarily transfer the administration of their CIAP to another AFP and/or in those cases where the AFP in which the worker is affiliated is in the process of merger and/or liquidation.

During the transfer process from the Origin AFP to the Destination AFP, the worker retains their status as incorporated into the SAP. The transfer of AFP does not imply a change of NUP.

CHAPTER II
ON TRANSFER BETWEEN AFPS

Transfer Conditions
Art. 5.- An active, inactive, pensioned affiliate, or their survivors' pension beneficiaries, may transfer from one AFP to another, in the following cases:
a) When the affiliate has made at least twelve continuous or discontinuous monthly contributions to the Origin AFP before signing the transfer request; or when the pensioned affiliate or their beneficiaries, if they are holders of a survivors' pension, have received from the Origin AFP, the payment of twelve pensions; b) When the AFP in which the worker is affiliated records, during two continuous months or three discontinuous months, a profitability lower than the minimum profitability established in Art. 81 of the Law; c) When the AFP fails to comply with what is stipulated in the Affiliation Contract; and, d) In the event of the merger or dissolution of the respective Administrator Institution.

Art. 6.- To sign a Transfer Request, the affiliate must do so with the participation of an Agent, either at an Agency of the Destination AFP or outside of it; said request must be prepared with the assistance of the Agent, carefully incorporating the data provided by the affiliate.

Likewise, the applicant must appear within a period not exceeding thirty days, after signing the Transfer Request, to sign the Book at any of the Agencies of the AFP where they are affiliated. Once this period expires, the procedure will be cancelled.

CHAPTER III
ON THE REQUEST AND CONTRACT FOR THE TRANSFER OF AFILIATES BETWEEN AFPS

Art. 7.- The agent, at the time of signing the Transfer Request by the affiliate, must also request the signature of the respective Contract.

On the Form
Art. 8.- The Request and Contract referred to in the previous articles will form part of a single form.

Art. 9.- The AFPs must make the Transfer Request forms between AFPs available to the public in their offices, agencies, and through their Agents.

Art. 10.- The forms will be printed in original and two copies with consecutive numbering, with the following recipients:
a) The original will correspond to the AFP; b) The first copy will correspond to the affiliate; and, c) The second copy will correspond to the employer.

The original of the form will have a detachable password at the bottom that will contain the same numbering as the form and will be delivered to the affiliate when they sign it.

This password must be presented by the affiliate at the Origin AFP when they wish to sign the Book.

On the Request
Art. 11.- To fill out the transfer request, the Agent will complete the section of the form with the interested party's data and attach a copy of the Unique Identity Document and/or affiliation card to the ISSS and INPEP, as applicable.

In the case of foreign residents in the country, a copy of their residence card or passport will be attached.

Art. 12.- For the form to be valid, the intervention of an Agent will be required, as provided in the Business Management Regulation, who will act on behalf of the AFP and will be responsible for the information recorded in the form.

In all cases, it will be necessary for the applicant to stamp their fingerprint on the form, that of the thumb of the right hand; if not possible, that of any other finger, stating such circumstance in the respective form.

Art. 13.- Forms with blots, corrections, interlinear insertions, deletions, or other corrections will not be valid.

Art. 14.- The request will be signed only by the applicant. The Contract section will be signed when filling out the form, by the applicant and the Agent.

Art. 15.- The Destination AFP, at the latest three business days after the Transfer Request is signed, will transfer to the Origin AFP, via electronic file, the list of affiliates who signed the transfer request and who will appear to sign the Book.

Likewise, the aforementioned file must be transferred to the Superintendence for information and eventual audit purposes.

On the Verification of Contributions
Art. 16.- With the detachable password referred to in Art. 10, the affiliate, pensioned person, or beneficiary, must appear at any of the Agencies of the Origin AFP to sign the Book.

The Origin AFP will verify that the applicant meets the requirement of having at least twelve contributions to the AFP or that twelve pensions have been paid in the concept of pension, and must ensure that the information recorded in the electronic file received from the Destination AFP is identical to that contained in its database.

In those cases where the affiliate's information is not consistent with that contained in the database of the Origin AFP, the information will be updated as indicated by the Superintendence.

When the affiliate does not meet the requirement of twelve contributions, the Origin AFP will issue a Statement of Account to the affiliate, highlighting in it the number of contributions and/or monthly pensions registered at the AFP.

The detachable password of the Transfer Request will be returned to the affiliate after the completion of any procedure, except when they withdraw their intention to transfer.

On the Signing of the Transfer Book
Art. 17.- After verifying the requirement indicated in the first paragraph of the previous article, the affiliate or pensioned person will sign the Book at the Origin AFP.

If the applicant withdraws their intention to transfer, they must fill out the cancellation form for the transfer procedure, which will contain the signature of the applicant.

To this form, the original of the detachable password of the Request and Contract must be attached.

Art. 18.- The Origin AFP, on the 15th and 30th of each month, must send to the Destination AFP via electronic files the information corresponding to:
a) Detail of affiliates who signed the Book; b) Affiliates who do not meet the requirement of the number of contributions or pension payments to transfer; and, c) Detail of affiliates who filled out the cancellation form for the transfer procedure.

Likewise, the aforementioned file will be transferred to the Superintendence.

On the Consolidation of the Transfer
Art. 19.- The Destination AFP, with the information from the Origin AFP, will proceed to establish which transfers will be compensated the following month.

After the compensation is made, the Origin AFP and the Destination AFP must inform the Superintendence about the transfer of affiliates, to update the database it administers.

Interruption of the Transfer
Art. 20.- The transfer process will be interrupted by resolution of the Superintendence, if before it enters into effect, any of the following situations occur:
a) Death of the affiliate; b) Presentation at the Origin AFP of a request for disability qualification or request for old-age pension.

On the Contract
Art. 21.- After the confirmation of the transfer from the Origin AFP, the Destination AFP will proceed to do the following:
a) The Legal Representative of the AFP or the official designated by the Board of Directors for such purposes, within a period of five days, will sign the respective Contract, specifying the date on which it will enter into effect; b) After the Contract is signed, within an additional period of five days, copies of the Contract must be delivered to their respective recipients, with the AFP being responsible for timely delivery; c) In case there is more than one employer, the AFP will inform each of them about the matter. If it is the transfer of an independent worker, the AFP must send them the copy of the Contract for the worker and the one that would correspond to the employer; d). In case of loss of the Contract copies by any recipient, a copy can be requested from the Destination AFP, in which the word "COPY" must be stamped in uppercase.

On the Validity of the Transfer
Art. 22.- The date of transfer to the Destination AFP will be considered the first day of the month following the date of the Transfer Request, and said month will be considered for all effects as the first month of accrual at the Destination AFP. From this day, the rights and obligations between the affiliate and the Destination AFP will enter into effect.

Art. 23.- The rights and obligations existing between the affiliate and the Origin AFP will remain in effect until the transfer to the Destination AFP is effective.

While the rights and obligations of the Destination AFP do not enter into effect, the Origin AFP will provide the legal coverages for disability and survival for common risk.

Art. 24.- On the day the transfer enters into effect, the Destination AFP will open a CIAP in favor of the affiliate. On its part, the Origin AFP will transfer the funds of the CIAP of the transferred affiliate; as well as the work history and its corresponding documentary and magnetic file.

CHAPTER IV
ON THE TRANSFER BOOK

On the Authorization of the Transfer Book
Art. 25.- The Superintendence will authorize the Books to be used by each AFP, each Book will be bound and numbered consecutively.

The AFP must request the authorization of each Book, before exhausting the last one hundred declarations of the Book in use.

When requesting the authorization of each Book, the AFP will indicate for which Agency it is required. Said Book must remain in the premises authorized by the Superintendence, under the responsibility of the Agency Head or person designated by the Board of Directors for such purpose.

Art. 26.- The Books will be formed with consecutively numbered sheets, in quantities of no less than two hundred sheets, duly paginated in the upper right corner.

The Superintendence will stamp the sheets of the Book at the top, with the exception of the first, which will contain the authorization, indicating the AFP Agency to which it has been assigned and the number of folios it possesses.

Art. 27.- Once authorized, the Book will be valid until its sheets are exhausted and it is closed, or when the AFP enters into dissolution or merges.

Art. 28.- The Superintendence will keep a register of the Books authorized to each AFP, in which the authorization date of each one will be recorded, highlighting its order number, the number of sheets that compose it, the Agency for which it was authorized, and the date it was closed.

Art. 29.- The Superintendence will verify the availability of sufficient declarations per Book, to guarantee that affiliates can exercise their right to transfer in a timely manner. The AFP will be responsible for archiving exhausted Books.

CHAPTER V
ON THE DECLARATION OF INEFFECTIVENESS OF THE TRANSFER BETWEEN AFPS

Art. 30.- Once the transfer enters into effect with the Destination AFP, the Superintendence may declare it ineffective, when there is a resolution derived from an investigation process by the Superintendence.

The termination of the Contract will proceed, without prejudice to other legal sanctions and/or fines that may be applied to those responsible, according to the respective legislation.

Art. 31.- When the Superintendence declares a transfer ineffective, it will notify via Resolution to the Origin AFP, Destination AFP, and the affiliate. If the resolution ratifies that the transfer proceeds, it will notify only the interested party who presented the Request and the Destination AFP.

CHAPTER VI
FINAL PROVISIONS

Art. 32.- The condition indicated in Art. 5, letter b) of this Regulation, will be applied once the Superintendence officially publishes the pertinent indicators.

Art. 33.- The Regulation on Transfer Between Pension Fund Administrator Institutions, issued by Decree No. 119, dated November 11, 1998, published in Official Diary No. 231, Volume No. 341, of December 10 of that same year, is repealed.

Art. 34.- This Decree will enter into effect eight days after its publication in the Official Diary.

GIVEN IN THE PRESIDENTIAL HOUSE: San Salvador on the thirteenth day of the month of March of two thousand six.

ELÍAS ANTONIO SACA GONZÁLEZ,
President of the Republic.

JOSÉ GUILLERMO B. LÓPEZ SUÁREZ,
Minister of Finance.

JOSÉ ROBERTO ESPINAL ESCOBAR,
Minister of Labor and Social Welfare.

Decree No. 27 of March 13, 2006
Published in Official Diary No. 75, Volume No. 371, of April 25, 2006.
This compilation is an exact copy of what is established in the Official Diary.