Regulation on the Collection of Contributions to the Pension Savings System

DE No. 28/2006
DECRETO No. 28/2006
REGULATION ON THE COLLECTION OF CONTRIBUTIONS TO THE PENSION SAVINGS SYSTEM Approval: 13/03/2006 Validity: 03/05/2006

DECRETO No. 28

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 Law of the Pension Savings System was issued;

II. That in the Law referred to in the preceding consideration, the Pension Savings System was created for workers in the private, public, and municipal sectors, which includes, among others, the set of institutions that will administer the resources destined to pay the benefits that must be recognized to affiliates to cover the risks of Common Disability, Old Age, and Death;

III. That by Executive Decree No. 31 of March 10, 1998, published in the Official Diary No. 65, Volume No. 339, of April 3 of the same year, the Regulation on the Collection of Contributions to the Pension Savings System was issued to regulate the application of the provisions of the Law regarding the collection of contributions.

IV. That by Legislative Decree No. 891 of December 9, 2005, published in the Official Diary No. 238, Volume No. 369, of the 21st of that same month and year, articles 15 and 16 of the Law of the Pension Savings System, regarding contributions, were reformed, making it necessary to adapt the regulation that operationalizes them, while allowing, given the evolution of the Pension System, to simplify it and adapt it to the development of the system.

THEREFORE,

in exercise of its constitutional powers,

DECREE the following:

REGULATION ON THE COLLECTION OF CONTRIBUTIONS TO THE PENSION SAVINGS SYSTEM

CHAPTER I
GENERAL RULES

Object.
Art. 1.- The object of this Regulation is to facilitate and ensure the application of the provisions of the Law of the Pension Savings System, which regulate the collection of contributions to the Pension Savings System, the associated procedures, and the relationship with the collecting entities.

General Definitions.
Art. 2.- In the text of this Regulation, the following denominations and concepts will be used:

AFP: Pension Fund Administrating Institutions
SAP: Pension Savings System
Agency: AFP offices for public attention that can perform all SAP processes according to the Law and its Regulations.
CIAP: Individual Pension Savings Account
Days: Calendar days, unless it is expressly stated that they are business days.
Processing Entity: AFP or entity authorized by the Superintendency that processes the information contained in the payroll forms for pension contributions.
Fund: Pension Fund
Individual Payment Form: Declaration and payment form for contributions of independent workers and voluntary contributions made directly by dependent workers, which shall contain, at a minimum, the following information: NUP of the affiliate, full name, declaration date, contribution period, and amount of the contribution. IBC: Contribution Base Income Pension Institution: ISSS, INPEP, or AFP Law: Law of the Pension Savings System Organic Law: Organic Law of the Superintendency of Pensions Month of Accrual: That in which the deductions for the payment of contributions to the SAP are made to the worker subject to remuneration, corresponding to the month prior to the declaration and payment of the contributions.

NUP: Unique Pension Number
Payroll Form for Pension Contributions: Declaration form for pension contributions presented in writing by employers with fewer than twenty-five employees.
Summary Form: Document used to declare pension contributions by employers who submit pension forms in magnetic or electronic media.
Backlog: Pension contribution of a worker, paid to a Pension Institution other than the one to which the worker is or was affiliated.
SPP: Public Pension System
Superintendency: Superintendency of Pensions
Dependent worker: One under a labor dependency relationship Independent worker: Worker domiciled in the country, without a labor dependency relationship, and Salvadorans not residing in the country ISSS: Salvadoran Institute of Social Security INPEP: National Institute of Pensions for Public Employees Contributions: Contributions that workers and their employers make obligatorily as established in the Law. Voluntary contributions made are also considered contributions.

Mandatory Contributions.
Art. 3.- The obligation to contribute to the SAP begins when a worker joins the SAP, and implies the payment of the mandatory contributions referred to in Art. 13 of the Law.

Condition of non-seizability.
Art. 4.- All contributions are non-seizable.

Amount of contributions.
Art. 5.- The contribution rate to the SAP for dependent and independent workers will be that indicated in Art. 16 of the Law.

Voluntary Contributions.
Art. 6.- Affiliates to the SAP may make voluntary contributions in the amount and at the time they consider convenient according to Art. 17 of the Law. For this purpose, the dependent worker may give an instruction to their employer, authorizing the deductions, or, if preferred, may make them directly. Likewise, employers may make voluntary contributions to the worker's account. For tax purposes, in the case of independent workers, voluntary contributions will be those exceeding the maximum taxable IBC and will be made under their own responsibility, through the individual payment form.

Collection Procedure.
Art. 7.- The collection procedure for contributions of affiliates to the SAP, residing in El Salvador, will be carried out through banking entities operating within the country and registered in the Public Registry of the SAP, in accordance with Art. 37 of the Organic Law. Banking entities and each AFP must sign a collection services contract. The draft contract must be submitted, prior to its signing, to the Superintendency to verify its conformity with the regulations. Once the contract is granted, a copy must be sent to the Superintendency within three business days following. Such contracts must specify the conditions and deadlines for their execution and must contain, at least, the following clauses:
a) The services to be provided by the bank to the AFP, as well as the remuneration for them. b) The obligation of the bank to open a current account, in the name of the Fund, in which only the collection operations of the same will be registered, specifying the number of this account in the contract. c) The obligation of the bank to credit the collected amount only to the account indicated in the previous letter. d) The indication that the resources collected by the bank for the Fund will be immediately available to the AFP, regardless of the bank agency or branch where the collection was made. e) The submission of the bank signing the contract to the SAP regulations, applicable and in particular, those contained in this Regulation. f) The obligation of the bank to maintain identical characteristics regarding price, service quality, deadlines, and other specifications with all Pension Institutions to which it provides this service. The contract may not include exclusivity clauses. g) The obligation to avoid preferential treatment, and in general, any type of discrimination that benefits some affiliates or employers, to the detriment of others, in the execution of its collection work. h) The indication that the cost of the service will be paid by the AFP requesting the service. i) Obligation not to request additional information beyond the payroll form, the floppy disk or electronic file, and the summary form or receipt, referred to in this Regulation, as proof of the deposit made by the employer or independent worker, in the current account of the Fund administered by said AFP. j) The obligation to send daily, to the AFP, a detailed report of the pension forms received the previous day. k) The obligation to sign transfer contracts for the payment of forms charged to account, at the request of employers or workers interested in this service.

Processing of information.
Art. 8.- AFPs may sign contracts with entities authorized by the Superintendency, for the processing of information from payroll forms. The minimum content of the contracts will be stipulated by the Superintendency.

Contribution Base Income of Dependent Workers.
Art. 9.- The IBC of dependent workers will be as stated in Art. 14 of the Law.

Contribution Base Income of Independent Workers.
Art. 10.- Independent workers must declare their monthly income to the AFP, through a Payment Agreement only at the time of signing the respective affiliation contract, taking into account what is established in Art. 15 of the Law; said income may not be less than the current minimum monthly salary. Art. 11.- Workers who, while affiliated with the SAP, receive retroactive remuneration as a result of a salary increase, will not be subject to retroactive contribution, except in those cases where the retroactivity is attributable to bureaucratic procedures.

CHAPTER II
ON THE COLLECTION AND PAYMENT OF CONTRIBUTIONS OF DEPENDENT WORKERS

Payroll Form for Pension Contributions.
Art. 12.- Each employer will report, to the AFP, all affiliates under their labor subordination, in the pension contributions payroll form, which will constitute a sworn declaration.

Withholding and Payment of contributions.
Art. 13.- The contributions that the SAP must pay must be withheld and paid by the employer, by the subsidy paying entity, or by the entity paying pensions for occupational risks, as applicable, on behalf of the worker, through the pension contributions payroll form.

Payment Deadline.
Art. 14.- The employer, once the mandatory and voluntary contributions of the workers under their charge are determined, must proceed to the withholding, declaration, and payment of the same, to the current account of the Fund administered by the AFP, within the first ten business days of the month following the month in which the contributions were withheld. Payments made after the deadline indicated above will be subject to what is provided in Chapter XI of this Regulation.

Payment Declaration.
Art. 15.- Employers who have at least twenty-five employees must submit the declaration of pension contributions payroll forms, by magnetic, optical, or electronic means, accompanying them, in the first two cases, with a printed summary in accordance with the specifications dictated by the Superintendency. Declarations in magnetic or optical media will be considered pension contributions payroll forms presented through floppy disks or compact discs, respectively, and declarations by electronic means, those transmitted through communication networks. In the latter case, the AFP or the collecting entity, upon receiving the declaration, must issue, through the same channel, a receipt of acknowledgment. The design of the transmission of the declaration by electronic means, not the payment form, will be elaborated by the AFPs and approved previously by the Superintendency, which will also establish the general guidelines for its elaboration. Employers with twenty-four employees or fewer may opt to submit their declaration, in the form of the pension contributions payroll form, or as declared by employers with twenty-five or more employees.

Forms
Art. 16.- It will be the obligation of the AFP to make available to the employers of its affiliates the pension contributions payroll forms, previously authorized by the Superintendency.
Likewise, it will be the responsibility of the AFP to make available to the employers the computer programs and the free distribution of the manual that required employers or those who voluntarily opt to present the form in magnetic or electronic media require. The Superintendency will provide the AFPs with the computer program to present the form in magnetic media. Art. 17.- The pension contributions payment form or the summary referred to in Art. 15 of this Regulation must have a copy, distributing the copies as follows:
a) Original for the AFP. b) Copy for the employer.
The format of the pension contributions payment form will be defined by the Superintendency.
Art. 18.- Changes in the labor relationship of an affiliate with their employer will be declared by the latter in the pension contributions payment form, when resignations or dismissals, illnesses or maternity incapacities, transfer to another AFP, pensions for old age or disability, pensions for occupational risks, and other situations that must be clarified are registered, in the column designed in the form for this purpose. Notwithstanding the foregoing, if due to omission or error the changes have not been declared, they may be sent by written note to the respective provisional institution, with said note being incorporated into the sworn declaration of the form.

Payment Procedure.
Art. 19.- To make the payment of contributions, employers must comply with the following:
a) That the payments declared in a form correspond to the deductions of the same accrual month. b) If the employer pays its workers weekly or bi-weekly periods, the declared deductions will correspond to the payments made within the declared month, not exceeding in these deductions the declaration of five weeks or three fortnights, as the case may be. c) That the form be completed in its entirety by the employer, except for the information that the collecting entity must incorporate, after verifying the received data. d) That in case employers pay mandatory or voluntary contributions for previous periods, they must fill out, separately, a form per month. e) If the employer makes the payment at the counter of the collecting entity, they must attach to the documents and media associated with the chosen form of declaration according to Art. 15 of this Regulation, the cash or check in accordance with the provisions on the Management of Current Accounts of the Pension Fund. f) If the employer makes the payment by electronic means, they may do so through a fund transfer order or other existing electronic procedure. Upon completion of the transaction, the employer must print a payment receipt related to the corresponding form. g) The employer who makes the payment by magnetic, optical, or electronic means may declare in a single file, several accrual periods, obtaining a summary for each accrual, as regulated by the Superintendency, without prejudice to the lost profitability and late interest according to article 20 of the law. The Superintendency will establish the general guidelines for the design of data transmission and payment order by electronic means. The payments of pension contributions made by employers will be credited to the current collecting account of the Pension Fund.

Late Payment of Contributions.
Art. 20.- When employers incur in late payment of contributions, each AFP will be obligated to initiate actions aimed at the administrative and judicial collection of the owed contributions, their lost profitability, and late interest according to what is established in Art. 20 of the Law and in Chapter XI of this Regulation.

CHAPTER III
ON THE COLLECTION AND PAYMENT OF CONTRIBUTIONS OF INDEPENDENT WORKERS

Payment of contributions.
Art. 21.- The contributions of independent workers must be paid under their own responsibility, using the individual payment form.

Correspondence of Payments.
Art. 22.- Independent workers may pay, in addition to the contributions of the corresponding accrual, others in advance; and exceptionally, up to a maximum of two months of backlogged accrual.

Payment Form.
Art. 23.- Independent workers will make the payment of their pension contributions using the individual payment form model, which will be available to interested parties in the AFP agencies, or in banking entities with which it has signed collection contracts. The independent worker may also use the option to submit their declaration by magnetic media or electronically, as stated in Art. 15 of this Regulation.

Distribution and Payment.
Art. 24.- The individual payment form must have a duplicate, distributing the copies as follows:
a) Original for the AFP b) Copy for the independent worker.

CHAPTER IV
CONTRIBUTIONS OF AFFILIATES PENSIONED FOR OLD AGE Art. 25.- Affiliates pensioned for old age may continue to contribute, either as dependent or independent workers; these contributions will be credited to the CIAP as established in Chapter VIII of this Regulation and may be withdrawn each year in the same month in which the pension became effective or kept in the CIAP to increase the amount of their programmed pension. Art. 26.- The contribution rate that persons referred to in the previous article must pay will be that indicated in letter a) of article 16 and the administration commission will be in accordance with letter d) of article 49 of the Law. Art. 27.- In the case of pensioners for old age who continue to contribute and who are in a labor dependency relationship, their employer must manifest in writing to the AFP, their willingness to continue contributing on behalf of their worker. Art. 28.- If an AFP continues to receive contributions from the employer for a worker who is pensioned, without the employer, within a period of 30 days, having manifested in writing their willingness to do so, the AFP must immediately proceed to return individually to the affiliate and the employer, the total of the contributions in question at nominal value.

CHAPTER V
VOLUNTARY CONTRIBUTIONS

Definition.
Art. 29.- Voluntary contributions are those made by an affiliate to the SAP or the employer of that person, in addition to the mandatory contribution. Voluntary contributions do not exempt from the responsibility of paying mandatory contributions.

Characteristics and Procedures.
Art. 30.- Voluntary contributions will have the following characteristics:
a) They will not be subject to a limit. b) They may be made by dependent workers or their employers. c) They may be continuous or discontinuous.

Payment Modalities.
Art. 31.- The payment of voluntary contributions of workers and employers will be made in accordance with what is established in Art. 21 of this Regulation.

Voluntary Contribution in the Programmed Income.
Art. 32.- In case an affiliate is receiving a pension under the programmed income modality; they may make voluntary contributions, through the same procedure as independent workers.

CHAPTER VI
ON THE INDIVIDUAL PENSION SAVINGS ACCOUNT

Definition.
Art. 33.- The CIAP of each affiliate is that which records all movements made by the AFP in the exercise of the administration of the Fund, from the moment in which it joins the SAP.
The total sum of the CIAPs plus the Profitability Fluctuation Reserve constitute the Fund administered by the AFP, regardless of whether the contributions are duly credited or in the process of doing so.

Opening.

DE No. 28/2006
DECRETO No. 28/2006
REGULATION ON THE COLLECTION OF CONTRIBUTIONS TO THE PENSION SAVINGS SYSTEM Approval: 13/03/2006 Validity: 03/05/2006

Art. 34.- The opening of the CIAP in each AFP will occur under the following terms:
a) In the case of a worker who joins the SAP, from the date on which the AFP is notified by the Superintendence of the assignment of the NUP. b) In the case of transfers between AFPs, on the day the transfer enters into force, the destination AFP will open a CIAP in favor of the affiliate.

Balances.

Art. 35.- The opening of the CIAP entails the obligation of the AFP to keep updated the balances of mandatory and voluntary contributions.
Each balance must be registered in legal tender currency and in number of quotas. Likewise, for the determination of each individual balance, the profitability gained by its contributions and the percentage of default interest corresponding to the Fund will be added, which will be distributed according to the number of quotas each account has.

Documentary registration.

Art. 36.- The documentary registration of each transaction carried out in the CIAPs constitutes an integral element of accounting, and must be preserved in physical media or, alternatively, in another image storage medium that allows for rapid location.

Closing.

Art. 37.- The closing of a CIAP must occur when the affiliate:
a) Transfers the administration of the CIAP to another AFP. b) Receives communication that their affiliation contract has been declared void. c) Transfers the balance of their CIAP to an insurance company when contracting a life annuity. d) Has no right to state guarantee for minimum pension and the balance of their account is exhausted. e) When it concerns a foreigner to whom the balance is returned or transferred for permanently abandoning the country. f) When the return of the balance is appropriate in accordance with articles 125 and 126 of the Law. g) By return of the balance in accordance with literal b) of article 10 of the SAP Law.

Pension Savings Books.

Art. 38.- The balances of the CIAPs will be registered in Pension Savings Books. The AFP will be obligated to register in said book the balances when the affiliate requests it, with a maximum of six times per year, as regulated by article 51 of the Law. Each AFP must present the format to the Superintendence for approval beforehand. At a minimum, the book must contain the information from the mechanized account system of its affiliates. All amounts registered in it must be shown with an approximation of two decimal places.

DE No. 28/2006
DECRETO No. 28/2006
REGULATION ON THE COLLECTION OF CONTRIBUTIONS TO THE PENSION SAVINGS SYSTEM Approval: 13/03/2006 Validity: 03/05/2006

CHAPTER VII
OF THE AFFILIATE ACCOUNT SYSTEM

Art. 39.- Each AFP is obligated to maintain a mechanized account system for its affiliates, which must register at least the following information:
a) First surname, second surname, married surname, first and second name when applicable. b) NUP. c) Date of granting of the NUP.
Likewise, it must register each of the operations that imply movement in the cited account system, and must include, when applicable, the following concepts:
a) Date of operation. b) The operation code. c) The value of the quota corresponding to the date of the operation. d) The credits and debits to the CIAP expressed in legal tender currency and number of quotas; differentiating those coming from mandatory and voluntary contributions; and what corresponds to the retained fund and CIAP balance, if applicable. e) The updated balance and number of quotas after the transaction being registered. f) If contributions coming from arrears are made, include:
i. Date of receipt by the banking entity.
ii. The number of the pension contribution payment sheet.
iii. Month of accrual to which the contributions correspond.
All of the above does not exempt the AFP from registering the IBC, Employer Tax ID (NIT), and Labor History information.
Registered operations cannot be modified subsequently; except in the case of adjustment or by observation of the Superintendence, as well as for Labor History purposes.

Operation codes.

Art. 40.- The codes of the operations that imply movement in the affiliate account system will be defined by the Superintendence.

CHAPTER VIII
OF THE CREDITING TO INDIVIDUAL PENSION SAVINGS ACCOUNTS

Art. 41.- Once the CIAP has been opened, the AFPs are obligated to credit them with the mandatory and voluntary contributions paid by workers and employers, if applicable.

Reconciliation.

Art. 42.- Once payments are made, the AFP must carry out the following reconciliation:
a) Reconciliation of Sheets with bank credits. i) The collecting entity will send to the AFP, on the next business day after receiving the payment, the detailed list of said payments indicating the date of receipt at the cash desk and the agency or branch where it was received. Said list must identify the payments made under the different modalities considered in this Regulation. ii) The collecting entity will send the originals of the payment sheets to the AFP, the sheet summary and floppy disk or the document of acknowledgment of receipt of the information by electronic means, as applicable, within a period not exceeding two business days counted from the date of receipt of the payment. iii) After processing the payment sheets, the AFP will proceed to verify the amounts recorded in the "total to pay" with the list indicated in subsection i) of this article. b) Reconciliation of the Pension Contribution Payment Sheet. The AFP must verify that the sum of the contributions declared in the details supporting each payment coincides with the total contributions, as applicable. If these balances do not coincide, the procedure established in Chapter IX of this Regulation will be followed. When the payment sheet is presented in magnetic or electronic media, the AFP must reconcile the information contained in the floppy disk or electronic media with the printed summary or image of the payment.

Crediting.

Art. 43.- The crediting process is the responsibility of the AFP and consists of assigning the contributions made to the Fund to the accounts of their holders, for which it must carry out validations that allow identifying the owner of the contribution. The AFP must carry out the crediting within a period not exceeding thirty days counted from the day following the period established to make the payments of the contributions to the SAP. In no case, the contracting of an entity other than the AFP for the processing of the information will imply non-compliance with the deadlines stipulated in this Regulation.

Art. 44.- The crediting of contributions entails determining the following situations:
a) Identified contributions: are credits made in the current account of the Fund, whose holder has been identified as an affiliate of the AFP. b) Unidentified contributions: are credits made in the current account of the Fund and whose

DE No. 28/2006
DECRETO No. 28/2006
REGULATION ON THE COLLECTION OF CONTRIBUTIONS TO THE PENSION SAVINGS SYSTEM Approval: 13/03/2006 Validity: 03/05/2006 holder has not been identified as an affiliate of the AFP.

Art. 45.- In the case of unidentified contributions, they will be kept in an account called "Contributions to be credited".
The sum of the credited contributions, the contributions to be credited, commissions, and the obligations for arrears, must coincide with the total resources collected by the AFP in each period.

Art. 46.- For the purpose of concluding the crediting process, the AFPs will proceed to make the credit to the CIAPs. To do so, they will assign the data recorded in the pension contribution payment sheet, those corresponding to the mandatory and voluntary contributions of the worker based on the following criteria:
a) In the case of mandatory contributions, they will proceed to calculate the percentage established by Art. 16, literal a) of the Law, on the declared IBC of the worker. If this result coincides with that shown by the pension contribution payment sheet as monthly IBC, taking into account the respective observation codes, the mandatory contribution made will be fully validated; otherwise, the AFP must establish the amount of overpayment or underpayment, as applicable. In the event of underpayment, the AFP must proceed in accordance with what is stipulated in Article 50 of this Regulation, where applicable. When it is an overpayment, the procedure established in Art. 51 of this Regulation will be followed. Once deficiencies and excesses are determined, pension institutions may establish agreements with employers to compensate for them. b) In the case of voluntary contributions, the contributions declared in the sheet will be credited.

Commissions.

Art. 47.- The AFPs may receive as payment on account of their commissions an advance up to a limit equivalent to forty percent of the commissions collected the previous month, even if the crediting process has not been completed. This payment on account of the commissions may be made on the day following the expiration of the obligation to pay the contributions. To collect the remaining value of their commission, the AFP may withdraw from the Fund's account, on the first business day of each week, a value proportional to the CIAPs credited in excess of the advance payment received.

Arrears.

Art. 48.- The AFP that determines situations of arrears must follow the procedure established by the Superintendence.

DE No. 28/2006
DECRETO No. 28/2006
REGULATION ON THE COLLECTION OF CONTRIBUTIONS TO THE PENSION SAVINGS SYSTEM Approval: 13/03/2006 Validity: 03/05/2006

CHAPTER IX
ERRORS IN THE PENSION CONTRIBUTION PAYMENT SHEET

Definition.

Art. 49.- Errors in the pension contribution payment sheet can occur when the calculations made for the contributions do not coincide with the information declared as IBC, according to the current percentages or when the sums of the rows or columns do not correspond to their totals. For the purpose of determining payment deficiencies and excesses, the IBC information reported in the sheet will be taken as true.

Payment deficiencies.

Art. 50.- If after carrying out the reviews indicated in Art. 42 of this Regulation, differences due to deficiencies are determined between the deposited amount and the sum of the pension contributions and commissions, according to the sheet, the deposited amount will be credited first to the pension contributions and the remainder, if any, to the commissions corresponding to the AFP. When the received amount fully covers the contributions, the AFP must carry out the crediting to the CIAPs; otherwise, it must proportionally credit the CIAPs according to the following procedure:
a) The AFP will establish the sum of the result of multiplying the reported IBCs by the mandatory contribution rate, plus the voluntary contributions declared for each of the affiliates, if any. b) It will determine the proportion of the total effectively paid by each worker with respect to the total calculated in the previous literal. c) It will credit each CIAP, distributing the collected amount in the proportion calculated for each worker. d) It will establish the deficiency left uncredited in each CIAP and the commission amount. Once the procedure described in the previous paragraph is concluded, the AFP must communicate to the employer, with acknowledgment of receipt, within ten days of finishing the process referred to in this article, the error of payment deficiency found in the pension contribution payment sheet, to remedy it. If five days counted from the receipt of said notification have elapsed and the employer has not remedied the observation, the AFP must, on the next business day, proceed as follows:
a) Initiate the administrative collection procedure as established in Chapter XI of this Regulation. b) In case such collection is unsuccessful, it must initiate judicial collection.
Having recovered the default interest, whatever procedure was followed for this purpose, the distribution of the payment complement must be applied proportionally to the total owed, according to the payment precedence recorded in Art. 66 of this Regulation.

DE No. 28/2006
DECRETO No. 28/2006
REGULATION ON THE COLLECTION OF CONTRIBUTIONS TO THE PENSION SAVINGS SYSTEM Approval: 13/03/2006 Validity: 03/05/2006

Overpayment.

Art. 51.- An overpayment is considered when the employer pays contributions above the value corresponding according to the respective sheet.
In case of overpayments, the AFPs must notify the employer within a maximum period of five business days after having detected it.
For the return of said overpayments, the AFP may credit the excess balance to the bank account indicated by the employer in the payment sheet or agree with him, with documentary backing, that said balance be credited to an owed amount or future commitments. Overpayments will be effective at their nominal value, regardless of the time that has elapsed until the date of their return. The AFP will return the overpayments, as indicated in article 28 of this Regulation.

Request for return of overpayments.

Art. 52.- In case the employer detects on their own that they have made an overpayment, they must request the return to the AFP through the form or electronic means that the Superintendence will establish. Such request will be in duplicate, distributing the copies as follows:
a) Original for the AFP. b) Copy for the employer.

Art. 53.- In case the request referred to in the previous article is appropriate, the AFP will communicate to the applicant, within five days following the receipt of the request, the agency where the check for the overpaid amount will be available or sending them a copy of the account credit, as applicable. If considered rejected, the AFP will communicate the result of the request to the employer within the same period referred to in the previous paragraph, specifying the reasons for it.

Independent workers.

Art. 54.- In the case of independent workers, overpayments are considered those in which the amount recorded in the payment check is higher than what was declared in the respective individual payment form.
In this case, the procedure of Articles 52 and 53 of this Regulation will be followed.

CHAPTER X
OF THE ACCOUNT STATEMENT

Periodicity.

Art. 55.- The AFPs, at least every six months, must send to each of their affiliates an account statement with all the movements registered in their CIAP, since the issuance of the previous account statement, with indication of the number of quotas registered, their value and date. If an account does not record movements, the communication will be restored until new contributions are received. In any case, the AFPs will be obligated to inform of the balance of said accounts, at least once a year. The account statements referred to in the previous paragraph may be sent by electronic means, provided that the affiliate expresses their consent.

Content of the Account Statement.

Art. 56.- The AFP is also obligated to provide, immediately upon request of the affiliate, an updated account statement.

Art. 57.- The format of the account statement referred to in the preceding article will be established by each AFP with the approval of the Superintendence and must contain the minimum necessary elements indicated by it.

CHAPTER XI
TREATMENT OF UNPAID CONTRIBUTIONS

Definition.

Art. 58.- Unpaid contributions will be considered those that have not been paid by the employer, on behalf of their workers, within the period established by the Law, in accordance with what is stipulated in this Regulation, including the case of employers who present Declaration and Non-Payment sheets. Sheets presented outside the period indicated in the previous paragraph must be presented by the employer to the AFP, so that it prepares the collection settlement referred to in Art. 62 of this Regulation, so that the employer goes to the bank to pay. The Declaration and Non-Payment sheet must be presented by the employer to the respective AFP within the period established in the first paragraph of Art. 14 of this Regulation, and the AFP will proceed to process the information contained in said sheet. The employer, prior to making the payment at the bank, must withdraw from the AFP the collection settlement order referred to in Art. 62 of this Regulation.

Art. 59.- The AFPs are obligated to carry out administrative collection actions for contributions owed by employers and for the profitability left unperceived and default interest. Administrative collection actions must be initiated within the legal deadlines. If after the period established to initiate this type of collection has ended, the AFP has not done so, the affiliate, their beneficiaries or the Superintendence may request it and the AFP, without prejudice to what Article 175 of the Law establishes, must initiate the administrative collection action as indicated by the Law. If it does not do so, the AFP must send a report, within a period not exceeding 15 days, to the Superintendence, indicating the reasons for it.

Art. 60.- To carry out the administrative collection management, the AFPs may use any legal means they deem convenient, with the object of recovering the pension debt, in accordance with the Law and this Regulation.
Each collection action must refer to the amount of the employer's pension debt for each month owed.

Art. 61.- To initiate the administrative collection procedure, the AFP must inform the employer, under acknowledgment of receipt, about the failure to pay and their obligation to declare, specifying the names and NUPs of the workers who were included in the last declaration and who have not been declared within the legal payment period.

Art. 62.- The employer must present within a period of five days counted from the day following the notification, proof of defense or the respective contribution sheet. In case of presenting proof of defense, they will be accepted by the AFP only if attached are reliable documents supporting the observations. If observations duly supported by the employer have been presented, the AFP must resolve within a period of three days, and if collection proceeds, the employer must prepare a complementary sheet that includes the declaration of those workers whose contribution they omitted or reported incorrectly in their original declaration, and the AFP must record in said sheet the amount of default interest and the profitability left unperceived in the respective CIAPs, so that the employer proceeds to the respective payment. If the employer presents themselves at the AFP with the Pension Contribution Payment Sheet within the period indicated in the first paragraph of this article, it must corroborate, based on the data declared in said sheet, the amount of default interest and the profitability left unperceived in the CIAP of the workers at the date of their presentation, and must record them in the sheet presented by the employer, who must proceed to payment.

Art. 63.- The administrative procedure will conclude for the following causes:
a) By the expiration of the period referred to in Art. 20 of the Law, for the administrative collection of contributions in arrears. b) By the obligation being fully cancelled. c) By having proven the non-existence of a labor link with the affiliate during the months in which the contributions subject to the administrative procedure would have been retained. (1)

DE No. 28/2006
DECRETO No. 28/2006
REGULATION ON THE COLLECTION OF CONTRIBUTIONS TO THE PENSION SAVINGS SYSTEM Approval: 13/03/2006 Validity: 03/05/2006

DE No. 28/2006
DECRETO No. 28/2006
REGULATION ON THE COLLECTION OF CONTRIBUTIONS TO THE PENSION SAVINGS SYSTEM Approval: 13/03/2006 Validity: 03/05/2006

In the event that the necessary steps have been exhausted by the AFP in searching for the certain address of an employer or if the legal existence of the said employer is not proven, the responsibility of the AFP shall be temporarily exempted for this cause. Notwithstanding the foregoing, if the address or existence of the employer is subsequently discovered, the AFP must immediately reinstitute the respective administrative procedure. (1)

Art. 64.- Once the deadline for the administrative collection of pension arrears has expired, the AFPs must initiate the corresponding legal actions, in accordance with what is established in Art. 20 of the Law.

Art. 65.- The application of the priority of credits, regarding the outstanding contributions, shall be carried out in accordance with what is established by Art. 21 of the Law.

Art. 66.- Once the debts contained in the Liquidation Order have been recovered through the administrative or judicial route, they shall be applied according to the following order:
a) Foregone profitability in the CIAP, which shall be calculated in accordance with what the Superintendence establishes. b) Voluntary contribution of the affiliate. c) Mandatory contribution of the affiliate. d) Mandatory contribution of the employer. e) Commissions for the AFP. f) Late payment surcharges on contributions. g) Late payment surcharges on the AFP commission. h) Voluntary contributions of the employer. i) Legal costs in the judicial route.

Art. 67.- Contributions in arrears attributable to the employer may be paid directly by the affiliate or by their beneficiaries in the event of an accident involving the affiliate, provided that it is demonstrated that a labor dependency relationship existed; in any case, the total amount of the existing arrears of the affiliate's contributions shall be paid without prejudice to the sanctions that the Superintendence may apply in accordance with articles 159, 160 and 161 of the SAP Law and the legal actions that may be brought against the employer.

The payment of contributions referred to in the preceding paragraph may be made through the individual payment form or the contribution payment schedule, for which a stamp must be affixed identifying that it corresponds to contributions owed by the employer, issued by the originator or beneficiaries; in any case, these contributions cannot be reduced from the debt owed by the employer.

CHAPTER XII
FINAL PROVISIONS

Art. 68.- Written communications that AFPs send to their affiliates or employers must be issued under the charge and responsibility of the AFP.

DE No. 28/2006
DECRETO No. 28/2006
REGULATION ON THE COLLECTION OF CONTRIBUTIONS TO THE PENSION SAVINGS SYSTEM Approval: 13/03/2006 Validity: 03/05/2006

Art. 69.- The Superintendence may authorize the AFPs to fully substitute the information in their possession in physical media, with microfilms or other means of image storage that allow for rapid location, empowering them to destroy it provided that it has an age exceeding five years.

Art. 70.- The Collection Regulation, issued by Executive Decree No. 31 dated March 10, 1998, published in Official Gazette No. 65, Volume 339 on April 3 of the same year, is hereby repealed.

Art. 71.- This decree shall enter into force eight days after its publication in the Official Gazette.

GIVEN IN THE PRESIDENTIAL HOUSE: San Salvador, on the thirteenth day of the month of March of the year 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 Security.

MODIFICATIONS

1. Modified in accordance with Executive Decree No. 59 of May 25, 2009, published in O.G. No. 102, Volume No. 383 on June 4, 2009.

Executive Decree No. 28 approved on March 13, 2006 Published in Official Gazette No. 75, Volume No. 371, on April 25, 2006.

DE No. 28/2006
DECRETO No. 28/2006
REGULATION ON THE COLLECTION OF CONTRIBUTIONS TO THE PENSION SAVINGS SYSTEM Approval: 13/03/2006 Validity: 03/05/2006

This compilation is an exact copy of what is established in the Official Gazette.