Regulation for the Management of the Special Guarantee Contribution — BCR — SV

DE No. 13/2006
DECRETO No. 13/2006
REGULATION FOR THE MANAGEMENT OF THE SPECIAL GUARANTEE CONTRIBUTION Approval: 15/02/2006 Validity: 09/03/2006 Alameda Juan Pablo II, between 15 and 17 Av. Norte, San Salvador, El Salvador. Tel. (503) 2281-8000 www.bcr.gob.sv

DECRETO No. 13

THE PRESIDENT OF THE REPUBLIC OF EL SALVADOR,

CONSIDERING:

I. That by Legislative Decree No. 927, dated December 20, 1996, published in the Official Journal No. 243, Volume No. 333, of the 23rd of that same month and year, the Law of the Pension Savings System was issued;

II. That in order to comply with what is established in Art. 84 of the aforementioned Law, the Regulation for the Management of the Special Guarantee Contribution was issued, by means of Executive Decree No. 40, of March 15, 2002, published in the Official Journal No. 52 Volume No. 354 of the same date.

III. That said article has been modified by the latest reforms to the Law of the Pension Savings System, according to Legislative Decree No. 891 dated December 9, 2005, published in the Official Journal No. 238, Volume No. 369 of the 21st of that same month and year.

IV. That as a consequence of the reform related in the preceding consideration, it is necessary to issue a new Regulation that governs the application of the Special Guarantee Contribution.

THEREFORE,

In exercise of its constitutional powers,

DECREE the following:

REGULATION FOR THE MANAGEMENT OF THE SPECIAL GUARANTEE CONTRIBUTION

CHAPTER I
GENERAL PROVISIONS

Art. 1.- The object of this Regulation is to establish the procedures that Pension Fund Administrating Institutions (AFPs) must follow for the constitution and management of the Special Guarantee Contribution (AEG).

Art. 2.- In the text of this Regulation, the following designations will be used:

Superintendencia: Superintendencia de Pensiones.
AFP: Pension Fund Administrating Institution.
Ley del SAP: Law of the Pension Savings System.
Fondo: Pension Fund.
AEG: Special Guarantee Contribution.

Fund Real Asset: Item that groups asset accounts excluding Accounts Receivable, Provisional Securities, and the AEG Account of the General Balance Sheet of the Pension Fund. Provisional Securities: Securities that include Transfer Certificates, Complementary Transfer Certificates, and Provisional Investment Certificates. [1]

CHAPTER II
ON THE SPECIAL GUARANTEE CONTRIBUTION

Art. 3.- Each AFP must constitute and maintain an AEG, which shall serve to back the minimum profitability of the Fund it administers. This guarantee must be equivalent to 0.25% of the average real Fund asset of the fifteen consecutive calendar days prior to its calculation, which shall be constituted in accordance with what is established in Art. 84 of the Law of the Pension Savings System, and shall be unseizable for obligations other than those contracted with the Fund.

The AEG shall not be guaranteed by the Minimum Profitability established in Art. 81 of the Law of the Pension Savings System.

Art. 4.- When the AEG is constituted with the AFP's own resources, it shall be invested in Fund quotas, and shall be expressed at the current quota value on the day of the contribution.

They may also contract, for the constitution of the AEG, guarantees, sureties, or other financial instruments that allow them to back the required percentage.

Art. 5.- If an AFP does not maintain the equivalent to the required AEG, it shall be informed by the Superintendencia that it must pay it, and from the notice, it shall have fifteen days to do so.

Art. 6.- The AEG resources shall be used when the nominal profitability of the last twelve months of a Fund, in a specific month, is lower than the minimum profitability, referred to in Art. 81 of the Law of the Pension Savings System, in that same month, and the balance of the Profit Fluctuation Reserve, if any, is insufficient to cover the aforementioned difference; this must be covered within a maximum term of five business days.

In the event that the AEG is insufficient to cover the minimum profitability, the difference must be supplemented with resources from the AFP's equity, always within the same term of five business days.

Art. 7.- In the event that the AEG is invested in Fund quotas, and surpluses arise, these may be withdrawn the next business day after the excess is established; otherwise, it must be transferred to the voluntary quotas that the AFP has within the Fund.

Art. 8.- In the event that the AEG is guaranteed with sureties, these shall be contracted with the AFP's own resources, with financial entities registered in the Public Registry of the SAP and that have the minimum rating determined for issuances subject to being acquired with Fund resources.

The contracting of the surety cannot be carried out with companies of the same financial conglomerate to which the AFP belongs.

Art. 9.- Sureties shall be contracted for a period of one year, in favor of the Fund, which shall be payable on first demand, that is, the entity granting the surety shall make it effective upon the first demand of the AFP, and its amount must be sufficient to cover the AEG needs. This amount shall be established based on the expected growth of the real Fund asset.

The guaranteed amount may be adjusted monthly, based on the projected size of the real Fund asset at the end of each month, with the AFP being responsible that the guaranteed amount is not less than the daily AEG requirement calculated according to what is established in Art. 3 of this Regulation.

The signed surety contract must contain a clause guaranteeing the automatic extension of coverage after the annual expiration date, in order to ensure that if there are delays in signing the contract for the following year, there will be no coverage gap while the latter comes into force.

If the surety is made effective, the insurance company with which the contract was concluded must make the payment, by certified check in favor of the corresponding Pension Fund, within a term not exceeding five business days.

Art. 10.- Contracts for sureties, guarantees, or other financial instruments cannot be concluded without the prior review and authorization of the Superintendencia.

CHAPTER III
TRANSITIONAL PROVISIONS

Art. 11.- To comply with the reform of Art. 84 of the Law of the Pension Savings System, AFPs may gradually withdraw their AEG investments in the Fund, over a period of six months, counted from the validity of this Decree, for which they will present a plan to the Superintendencia for its authorization. They may also withdraw the voluntary quotas that AFPs have invested in the Fund they administer, within the same period established for the AEG.

The withdrawal of the AEG investments in the Fund referred to in the preceding paragraph shall be conditioned on the fact that the surety contracted to guarantee the AEG requirement is in force.

CHAPTER IV
FINAL PROVISIONS

Art. 12.- Executive Decree No. 40 of March 15, 2002, published in Official Journal number 52, Volume 354 of the same date, is repealed.

Art. 13.- This Decree shall come into force eight days after its publication in the

Official Journal.

GIVEN IN THE PRESIDENTIAL HOUSE: San Salvador, on the fifteenth day of the month of February of the year two thousand six.

ELIAS ANTONIO SACA GONZALEZ
President of the Republic.

JOSE GUILLERMO BELARMINO LOPEZ SUAREZ
Minister of Finance.

JOSE ROBERTO ESPINAL ESCOBAR
Minister of Labor and Social Security.

MODIFICATIONS:

1) Modified by Executive Decree No. 117 of November 6, 2006, published in the Official Journal No. 221, Volume No. 373 of November 27, 2006.

Decree No. 13 of February 15, 2006
Published in O.J. No. 42, Volume No. 370, of March 01, 2006.
This compilation is an exact copy of what is established in the Official Journal.

Lineage: No known changes