Lima, 12 November 2018

S.B.S. Resolution No. 4409-2018 The Superintendent of Banking, Insurance and Private Pension Fund Administrators

WHEREAS:

That, by Supreme Decree No. 054-97-EF, the Single Ordered Text of the Law of the Private Pension Fund Administration System was approved, hereinafter the SPP Law;

That, by Supreme Decree No. 004-98-EF, the Regulation of the aforementioned SPP Law was approved, hereinafter the Regulation;

That, article 1 of the SPP Law provides that the Private Pension Fund Administration System (SPP) aims to contribute to the development and strengthening of the social security system in the pension area, in order to provide protection against the risks of old age, disability and death, and is mainly composed of the Private Pension Fund Administrators (AFP), which manage the pension funds. Additionally, insurance companies that provide the corresponding benefits participate in the SPP, as well as the entities or instances that participate in the operational processes associated with the administration of pension funds;

That, article 14-A of the SPP Law establishes that the AFPs freely choose the centralizing entity, for which purpose the Superintendency, based on the technical evaluations it carries out and in a reasoned manner, will establish the necessary mechanisms to implement mandatory centralization or the mandatory use of one or more common platforms in different processes, including the calculation and payment of benefits;

That, on the other hand, the Seventh Final Complementary Provision of Law No. 29903, Law of Reform of the Private Pension System, states that in cases of retirement pension payment in which an insurance company intervenes, the payment must be made directly by the insurance companies through a centralized mechanism or service centers, in accordance with the provisions issued by the Superintendency;

That, by Resolution No. 232-98-EF/SAFP, Title VII of the Compendium of Regulatory Superintendency Rules of the Private Pension Fund Administration System regarding Benefits was approved;

That, Laws No. 30425 and No. 30478 have modified the legislative framework of the Private Pension Fund Administration System (SPP), in order to allow the affiliate, from 65 years of age, to choose between receiving the pension corresponding to them in any retirement modality or requesting the AFP to deliver up to 95.5% of the total available fund in their individual capitalization account (CIC), in the installments they consider

necessary; treatment that also extends to affiliates who have accessed or have availed themselves of the early retirement regimes provided for in the SPP;

That, based on the evaluations carried out on the process of granting benefits within the SPP and the provisions of article 14-A of the SPP Law and the Seventh Final Complementary Provision of Law No. 29903, it is necessary to modify the regulations applicable to the payment of benefits to affiliates who are close to retiring or those who already have the status of pensioners, so that the payment of the corresponding benefit by the AFPs or insurance companies is made within a framework of adequate security and continuity;

That, in order to gather the opinions of the general public regarding the proposed modifications to the SPP regulations, the pre-publication of the draft resolution on the matter was ordered on the Superintendency's electronic portal, under the provisions of Supreme Decree No. 001-2009-JUS and its amendments;

With the approval of the Deputy Superintendencies of Private Pension Fund Administrators, Insurance, Market Conduct and Financial Inclusion, and Legal Advice; and,

In use of the powers conferred by the Seventh Final Complementary Provision of Law No. 29903, numeral 9 of article 349 of the General Law of the Financial System and the Insurance System and Organic Law of the Superintendency of Banking and Insurance, Law No. 26702 and its amendments, and subsection d) of article 57 of the SPP Law, as well as by the provisions of the Third Final and Transitory Provision of its Regulation;

RESOLVES:

Article One.- Incorporate Subtitle V to Title VII of the Compendium of Regulatory Superintendency Rules of the Private Pension Fund Administration System, approved by Resolution No. 232-98-EF/SAFP and its amendments, according to the following text:

“SUBTITLE V PROCESS OF PAYMENT OF RETIREMENT PENSIONS BY LIFE ANNUITIES CHARGED TO INSURANCE COMPANIES

Article 289.- Pension payment process.

For the purposes of the provisions of this subtitle, the pension payment process is an operational and administrative procedure that allows the interaction of an insurance company with the pensioners who contract any of the life annuity modalities, after the subscription and completion of the effects of Section V of Annex 1 of the retirement pension application, under the scope of articles 6 and 291 of this title.

The effects derived from Section V of the pension application are all those activities associated with the payment of life annuities.

Article 290.- Activities included in the pension payment process.

The pension payment process by insurance companies includes, at least, the following activities:

a) Preparation, validation and reconciliation of preliminary and final pension payment payrolls;

b) Management of additions and removals of pension beneficiaries;

c) Closing and approval of the final pension payment payrolls;

d) Execution of the monetary transfer of the pension amount;

e) Handling of inquiries, requests and/or claims regarding the pension payment process;

f) Generation and making available of pension payment slips; and,

g) Other activities, at the discretion of the Superintendency, which are made known through a general instruction.

With regard to item a), no modifications or additional entries of information may be made after the approval of the final pension payment schedules.

Article 291.- Types of pensions included in the payment process under the responsibility of insurance companies.

The following benefits are included:

a) Retirement pensions, under any characteristic or retirement regime, granted under any of the annuity modalities; and,

b) Survivorship pensions derived from retirement pensions, granted under any of the annuity modalities.

With regard to item b), pension beneficiaries must adhere to the requirements established in the procedure set forth in Article 102 of this title, in the event the affiliate who is the pension holder has contracted an annuity.

Article 292.- Schemes for carrying out the pension payment process.

Insurance companies choose the type of scheme through which they carry out the pension payment process and communicate it to the Superintendency, which issues its non-objection. The types of scheme may be:

a) Service centers: physical locations or electronic platforms under the responsibility of the insurance company, through which affiliates and beneficiaries access services related to the pension payment process, such as the submission and handling of inquiries, claims, requests for making available pension payment slips through virtual or physical means, management and submission of information on additions and removals of pension beneficiaries, requests for reactivation of the pension after a suspension, as well as any other information related to the pension payment process; or,

b) Centralized mechanism: physical locations or electronic platform under the responsibility of the collective of insurance companies tasked with carrying out the retirement pension payment process under any of the annuity modalities.

The schemes for carrying out the pension payment process are subject to the control and supervision of the Superintendency, in accordance with the provisions of this title and the rules issued by the Superintendency in exercise of its powers.

In any of the schemes chosen by the insurance company, the service provided to the pensioner must be evidenced in accordance with the provisions of the User Service Circular, Circular No. G-184-2015 and its amending rules.

The insurance company is responsible for the proper management of the pension payment process and the activities it comprises, including the documentary collection of pension payments.

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Article 293.- Link of retirement annuity pensioner affiliates with the AFP.

Those affiliates who have the status of retirement pensioners or the beneficiaries of survivorship pension derived from a retirement pension under an annuity maintain a link with the AFP for the processing of the procedures that must be handled, such as the process of recovery and collection of contributions, processing and redemption of the recognition bond or accreditation of other types of resources in their mandatory contribution CIC, among others that involve the entry of resources into the corresponding CIC.

The AFP must keep in the affiliate's individual file the documentation derived from the procedures referred to in the preceding paragraph.

Article 294.- Remission of information from the AFP to the insurance company.

The AFP must send, within a period no greater than fifteen (15) days, the documentary information required by the insurance company, regarding the provisions of Article 290. Said period must be counted from the moment of the signing of Section V of the Retirement Pension Procedure Application.

The AFP must send all information related to retirement pension payments that is relevant for the pension payment process by the insurance company. The aforementioned information includes aspects such as: the name of the financial system entity, account type and codes, interbank codes, beneficiary data, as well as information related to the home address, telephone numbers, email address of the pensioner, among other aspects required for the payment to be made within the periods established in this title.

The insurance company is responsible for keeping updated the personal data information of the affiliate and/or pensioner beneficiaries described in Article 291 of this title.

Article 295.- Remission of information and reports to the Superintendency.

The insurance company must send the information of the annexes corresponding to Circular No. AFP-018-2002, referring to the statistical information on retirement and survivorship pension benefits derived from retirement pensioners under annuities, according to the formats of Annexes No. 1, 2 and 3.

The information corresponding to the benefits administered by the AFP must adhere to the formats contained in the aforementioned Annexes No. 1, 2 and 3."

Article Second.- Replace Article 6, items I, II and IV of Article 57 and Article 102 of Title VII of the Compendium of Rules of the Superintendency Regulating the Private Pension Fund Administration System, approved by Resolution No. 232-98-EF/SAFP and its amendments, with the following texts:

"Article 6.- Payment of benefits. The payment of benefits and the operational processes associated with it are the responsibility of the AFP or insurance companies, as applicable, and they must carry out the necessary actions, in accordance with the provisions of current regulations.

The AFP are responsible for the payment of disability, survivorship, and funeral benefits under any pension modality; as well as retirement benefits granted under the programmed withdrawal or temporary income pension modality.

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Insurance companies are responsible for the payment of retirement benefits granted under any of the annuity modalities; as well as survivorship pensions derived from retirement pensions under any of the annuity modalities, in accordance with the provisions of article 291º of this title.

The AFP, in order to carry out their responsibility, may agree and/or establish agreements with insurance companies for the payment of the corresponding benefits, in accordance with the provisions of the significant outsourcing processes set forth in Chapter IV of the Corporate Governance and Comprehensive Risk Management Regulation.

The pension payment procedures are subject to the conditions set forth in article 57º of this title.

In the event of non-compliance with any type of payment, transfer, or other similar operation linked to benefits within the SPP, within the deadlines stipulated in this title, the AFP or insurance company, as the case may be, must assume the payment of default interest for payments, transfers, or other similar operations in soles or United States dollars, in accordance with the conditions established for such purpose by the Superintendency.”

“Article 57º.- Procedure for pension payment. In accordance with the provisions of article 6º of this Title, the AFP or insurance company must follow the following procedure:

I. On the pension payment mechanism.- The affiliate or beneficiaries must provide the necessary information and documentation of the account at a financial institution agreed upon with the AFP or insurance company, so that they make the monthly deposits of the corresponding pension amount. Exceptionally, in scenarios of physical impossibility of the affiliate and/or beneficiaries, the AFP or insurance company enables another modality, such as the receipt of the pension check at the domicile of the affiliate or pensioner beneficiary or other modalities that facilitate the collection of the pension.

II. On the verification of the survivor status.- The AFP or insurance company must adopt mechanisms so that its verification systems allow validating the survival status of the affiliate or pensioner beneficiary, in accordance with the regulatory provisions on the matter. (…)

IV. On improperly made pension payments.- In those cases in which the AFP or insurance company, due to ignorance of the affiliate's status, had paid pensions for retirement after the date of death of the affiliate, it is empowered to deduct from the corresponding survivorship pensions the amounts improperly received, proportionally with respect to the pensions granted to the beneficiaries, as well as to recover those contributions to health regimes made on the occasion of the payment of said pensions, in accordance with the procedures established by the Superintendency. In the case of Programmed Withdrawal, only the contributions to the health regime are recovered. This procedure also applies in the case of disability pensions granted after the date of death.”

“Article 102°.- Procedure in case of Annuity. In the case of affiliates who at their death were pensioned under any modality or tranche of the Annuity, the procedure is as follows:

a) The beneficiaries must communicate the death of the affiliate or the judicial declaration of presumed death to the insurance company, which grants the corresponding survivorship pensions.
To do so, the beneficiaries must comply with presenting the "Survivorship Pension Application" and the documentation that accredits them as such, in case it has not been presented, in accordance with the information contained in Annex No. 8, substituting for that purpose the references of the AFP with the insurance company.

b) Once the insurance company has verified the status of the applicant, it must proceed to make the respective survivorship payments under the same payment periods and procedures that were being made for the deceased pensioner.”

Article Third.- Incorporate the final and transitional provisions forty, forty-first, forty-second, and forty-third into Title VII of the Compendium of Superintendency Regulatory Norms of the Private Pension Fund Administration System, approved by Resolution No. 232-98-EF/SAFP and its amendments, in the following terms:

“Fortieth.- Insurance companies must present to the Superintendency, within sixty (60) calendar days counted from the entry into force of Resolution SBS No. 4409-2018, the proposal of the standard scheme to be implemented for the pension payment process, according to the options provided in article 289º. Said proposal must include an implementation schedule in a GANTT chart agreed upon with the AFP and with the detail of the actions they will carry out.

Once the proposal is received and after the non-objection by the Superintendency, the pension payment scheme must be implemented within the period provided in article fifth of the aforementioned resolution.

Forty-first.- Pensioners under a retirement life annuity and beneficiaries of derived pensions who hold such status prior to the entry into force of SBS Resolution No. 4409-2018, based on the implementation schedule provided in the forty-first final and transitory provision, as well as on the proper guidance of the case, may choose to maintain the pension payment mechanism they had chosen at the time or migrate to the one established in Article 57.

To comply with the provisions, the AFP must inform, at the time and by the means it deems appropriate, the affiliates and beneficiaries covered by the scope of this provision, of the main aspects related to the migration to a new entity as responsible for the payment of their pensions, for which purpose they must ensure that such exercise of option is communicated as a prior condition for an adequate transfer of the mandates of the pension payment processes from the AFPs to the insurance companies.

Forty-second-. From the entry into force of SBS Resolution No. 4409-2018 and in accordance with the GANTT chart for the implementation of the pension payment scheme chosen in accordance with Article 292 of this title, the AFPs and insurance companies must carry out the dissemination work regarding the scope of the provisions of Subtitle V of Title VII.

Forty-third.- For the purposes of the payments of the benefits provided in Article 6 and Subtitle V of this title, the provisions of Article 9A are applicable to insurance companies, to the extent relevant.” Article Four.- Any reference to the terms “AFP” with respect to the pension payment process contemplated in Title VII of the Compendium of Regulatory Standards of the SPP, must be understood by extension for all its effects, as the “insurance company” that grants the payment of the retirement pension under some modality of life annuity, according to the scope of the provisions of Article 1 of the Single Ordered Text of the Law of the Private System of Pension Fund Administration, approved by Supreme Decree No. 054-97-EF.

Article Five.- This Resolution enters into force from the day following its publication in the Official Gazette El Peruano, with the adaptation period for the implementation of the pension payment process by the insurance companies being 1 June 2019.

Register, communicate and publish.

SOCORRO HEYSEN ZEGARRA
Superintendent of Banking, Insurance and
Private Pension Fund Administrators