Lima, 16 October 2013

S.B.S. Resolution No. 6203-2013

The Superintendent of Banking, Insurance and Private Pension Fund Administrators

WHEREAS:

That, by Law No. 29903, the Law for the Reform of the Private Pension System was approved, which amends the Single Ordered Text of the Law of the Private System for the Administration of Pension Funds, hereinafter SPP, approved by Supreme Decree No. 054-97-EF;

That, by Supreme Decree No. 137-2012-EF, provisions were issued for the application of Law No. 29903, specifically with regard to the first bidding and award of the individual accounts service;

That, article 7A of the Single Ordered Text of the SPP Law establishes that the Superintendency shall put out to bid the service of administration of the individual capitalization accounts of mandatory contributions of workers who join the SPP, so that they are affiliated with the AFP offering the lowest administration commission, every twenty-four (24) months, and the maximum period for the first bidding and award is 31 December 2012;

That, by SBS Resolution No. 8517-2012, the aforementioned bidding procedure for the service of administration of the individual capitalization accounts of mandatory contributions of workers who join the SPP was approved;

That, likewise, the aforementioned resolution establishes the situations by which workers incorporated into the SPP and affiliated with the AFP with the lowest administration commission through the bidding process may transfer to another administrator during the mandatory permanence period of the aforementioned process;

That, to that end, it is necessary to establish the regulatory framework that allows the full application of the exercise of the transfer of workers who join the SPP, in the event that the net commission profitability by type of fund of the awarding AFP is lower than the market comparative;

That, in addition, it is necessary to establish the amendments to Title III of the Compendium of Superintendency Regulatory Rules of the SPP, referring to Business Management, with regard to the operation of the Pension

Advisory Offices (OAP) and Mobile Posts (PM), in such a way that it is possible to have means and mechanisms of higher quality of service on the part of the AFPs with their affiliates in the administration of pension funds, contributing to improving the service standards of the SPP;

With the approval of the Deputy Superintendencies of Private Pension Fund Administrators and Insurance, of Economic Studies and of Legal Advisory; and,

In use of the powers conferred by 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, subsection d) of article 57 of the Single Ordered Text of the Law of the Private System for the Administration of Pension Funds, approved by Supreme Decree No. 054-97-EF, and the second complementary and final provision of Law No. 29903, and on the basis of the exceptional conditions set forth in numeral 3.2 of article 14 of Supreme Decree No. 001-2009-JUS;

RESOLVES:

Article One.- Incorporate Subchapter II-G to Chapter I of Title V of the Compendium of Superintendency Regulatory Rules of the SPP, under the following text:

"SUBCHAPTER II-G OF THE GROUNDS FOR TRANSFER IN THE BIDDING OF AFFILIATES LAW 29903

Article 17NN.- Minimum permanence of bidded affiliates to request their transfer due to lower net commission profitability. Workers who were incorporated into the SPP through the bidding of affiliates established in Law 29903 may initiate the transfer procedure to another AFP from the date on which they complete one hundred eighty (180) calendar days of permanence in the AFP awarded the bidding, provided that on the date on which they carry out the consultation procedure referred to in article 17OO, it is verified that the net commission profitability by type of Fund of the awarding AFP is lower than the market comparative, in accordance with the provisions of subsection a) of article 7E of the Single Ordered Text (TUO) of the SPP Law.

Article 17OO.- On the transfer consultation procedures. To verify compliance with the ground for transfer referred to in subsection a. of article 17PP, the affiliate must do the following:

i. Consult, on the website of the AFP awarded the bidding, the application that verifies the possibility of transfer in accordance with the provisions of article 17VV;

ii. Enter their DNI; in the case of foreigners, they must enter their CUSPP;

iii. Verify compliance with the permanence period provided for in article 17NN, through the application published on the website of the AFP awarded the bidding;

iv. In the event that the net commission profitability of this AFP is lower than that of any other administrator, an "AFP exit certificate" shall be generated, specifying the following:

a. Date and time of the consultation;

b. List of AFPs that recorded higher net commission profitability than the AFP awarded the bidding, and the affiliate may transfer, if they so wish, to any AFP that is in the aforementioned list.

c. Validity date of the aforementioned certificate to submit a transfer request before any of the AFPs indicated in subsection iv.b above. The validity date shall be ten (10) calendar days counted from the date referred to in subsection iv.a above.

With the information shown, the affiliate may transfer, if they so wish. If their decision is affirmative, they may initiate the transfer procedure, for which purpose they must attach to the corresponding Transfer Request a printout of the aforementioned exit certificate, within the period indicated in subsection iv.c. of this article.

A copy of said record must be kept by the AFP in the Affiliate's Folder.

Article 17PP°.- Causes for transfer. Affiliates incorporated into the SPP through a bidding process may only transfer to another AFP, during the mandatory permanence period established in article 7A° of the Law, when they are in any of the following cases:

a. The net profitability of commissions by type of Fund of the AFP awarded the bidding is less than the market comparative.

b. The AFP awarded the bidding is requested or declared bankrupt, as well as declared in dissolution or is in the process of liquidation.

For the purposes of the provisions in subsection a., those commissions that consider a discount based on the permanence time that any AFP could offer in the form of permanence plans, as referred to in article 53° and following of Title III of the Compendium of Regulatory Norms of the Superintendency, approved by Resolution No. 053-98-EF/SAFP and amendments, as well as by the provisions of the forty-fourth final and transitory provision of Title V of the aforementioned Compendium, shall not be taken into consideration.

Article 17QQ°.- Responsibility for calculating net profitability. The AFP awarded the bidding of new affiliates must implement from the public area on its website an application that calculates the net profitability of commissions as established in this subchapter and verifies the minimum permanence in accordance with the provisions of article 17NN°.

The AFP awarded the bidding shall be responsible to the affiliates and the general public regarding the characteristics, functionality and facilities presented by said application, and must ensure minimum standards regarding its proper functioning, continuity and use under online operations by users. Likewise, it must ensure its placement in a visible place on its website and connectivity with the electronic portal of the Superintendency.

Article 17RR°.- Sources of information. The calculation of the net profitability of commissions indicated in literal a. of article 17PP° shall be made with the daily quota values adjusted by type of pension fund and the components of commission on remuneration and commission on balance of the mixed commission published on the website of the Superintendency, according to information provided by the AFPs. The aforementioned information shall be sent monthly by the Superintendency to the AFP awarded the bidding through the supervised portal or official letter on a date prior to that set in article 17SS°.

Los Laureles No. 214 - Lima 27 - Peru Tel.: (511)6309000 Fax: (511) 6309239 4 / 8

The information on remuneration shall correspond to that recorded by the AFP awarded the bidding on the occasion of the last accredited mandatory contribution of the affiliate in its Individual Capitalization Account.

The source of information for the Consumer Price Index of Metropolitan Lima is the one published by the National Institute of Statistics and Informatics (INEI) in the Official Gazette El Peruano.

Article 17SS°.- Responsibility for updating the information used in the calculation of the net profitability of commissions. The information used in the calculation of the methodology applied to verify the cause for transfer referred to in article 17VV° shall be updated monthly, under the responsibility of the AFP awarded the bidding, within the first ten (10) calendar days of each month and until the mandatory permanence period of the affiliates incorporated into the SPP through bidding ends.

The aforementioned information refers to the components of the mixed commission (remuneration and balance), the adjusted daily quota value of each type of pension fund, the affiliate's remuneration and the Consumer Price Index of Metropolitan Lima (CPI).

Article 17TTº.- Cause for transfer due to declaration of bankruptcy, dissolution or the AFP being in the process of liquidation. The cause for transfer indicated in literal b. of article 17PPº shall be verified once the temporary administration of the pension funds by another or other administrators begins, in accordance with the provisions of Article 71° of the Law, and the provisions of Title XI of the Compendium of Regulatory Superintendency Norms of the SPP, approved by Resolution No. 538-98-EF/SAFP.

Article 17VV°.- Verification of the cause for transfer due to Net Profitability of Commissions. The cause for transfer indicated in literal a. of article 17PPº shall be validated using the methodology for calculating the net profitability of commissions, which shall be based on the differential of commissions on remuneration (DCR) and the differential of net profitability of commissions on balance (DRN).

When the DCR is less than the DRN, compliance with the cause for transfer due to lower net profitability of commissions is verified.

The differential of commissions on remuneration (DCR) and the differential of net profitability of commissions on balance (DRN) shall be calculated by applying the following methodologies:

a. Differential of commissions on remuneration




 
 

 

23
0
(23 1) / 24
(23 1) / 24 (
)*
*(1
)
*(1
) i
G i i i
M DCR cri cr
W
 d

Where:
DCR
= Differential in nuevos soles between the commission on remuneration charged by the AFP awarded the bidding and the non-awarded AFP, expressed to three truncated decimals. G = AFP awarded the tender. M = AFP not awarded the tender. S = G or M.

i
= Month: i = 0, 1, 2,.…n, n+1, n+2,…..23.
0
= Month of affiliation (corresponds to the first month of accrual). n = Month prior to the month of verification of compliance with the cause of transfer due to lower net return after commissions. S i cr = Commission component on remuneration of the mixed commission, expressed in percentage terms, applied by AFP S in month i. For months i=0,1,2,3…...n, the commission on remuneration in force in each of these months is applied. For months i=n+1, n+2,…..23, the following formula is applied:


S i
S i
S i cr mínimo crmc ,crmv
, whose variables are the following:
S i crmc = Commission component on remuneration of the mixed commission of AFP S, in month i, expressed in percentage terms, resulting from applying the commission reduction schedule on remuneration established in Resolution SBS N° 8514-2012. S i crmv = Commission component on remuneration, expressed in percentage terms, that AFP S will apply to affiliates under mixed commission in month i. This commission will be for all months i=n+1, n+2,….23 the commission in force in month i=n, unless the AFP communicates in writing to this Superintendency a change on a certain future date, in which case the application of the new commission shall be subject to the provisions set forth in article 102º of the Regulation of the TUO of the SPP law, being susceptible of being considered for the calculation referred to in this article. W = Corresponds to the remuneration of the last contribution credited of the affiliate between month 1 and month n, the same that remains constant for the entire calculation period. d = Annual real adjustment rate equal to 5%.  = n n IPC IPC 12/ 0       -1 0 CPI = Consumer Price Index of metropolitan Lima for the month of affiliation. n CPI = Consumer Price Index of metropolitan Lima for month n.

b. Net profitability differential after fees by balance

 
 














 










24
1
24
1
,
,
24
1
,
, * (1
)(1
)

• (1
  )(1
  ) i i
  G
  FK i
  G
  FK i i
  M
  FK i
  M
  FK i DRN
  A r csm
  A r csm

Where:

DRN
= Differential in nuevos soles of the net profitability of commissions by balance, expressed to three truncated decimals.
G
= AFP awarded the tender.
M
= AFP not awarded the tender.
S
= G or M. i
= Month: i = 1, 2,.…n, n+1, n+2,…..24.

1
= Month following the month of affiliation corresponding to the first month of payment of the contribution. n = Month prior to the month of verification of compliance with the cause of transfer due to lower net profitability of commissions. W = Corresponds to the remuneration of the last contribution credited of the affiliate between month 1 and month n, which remains constant for the entire calculation period. A = Mandatory contribution equal to 10% of W . S FK i r , = Real profitability of month i, of the pension fund K chosen by the affiliate and administered by the AFP S.

For months i=1, 2…n, it is defined as: 1 , 1 1 , ,            i i S FK i S S FK i FK i IPC IPC VC VC r

For months i= n+1, … 24, S FK i r , is defined as: 1 /,0 0 , ,           N L n S FK S S FK n FK i IPC IPC VC VC r

where S FK S VCFK,n andVC ,0 correspond to the pension fund K in which the affiliate is registered in month n.

N
= Number of calendar days of month i.
L
= Sum of the calendar days from month 1 to n (i=1,2…n).
S VCFK ,i
= Adjusted daily quota value of the last day of month i, of the pension fund K chosen by the affiliate and administered by the AFP S. S VCFK ,n = Adjusted daily quota value of the last day of month n, of the pension fund K chosen by the affiliate and administered by the AFP S. S VCFK ,0 = Adjusted daily quota value of the last day of the month of affiliation, of the pension fund K chosen by the affiliate and administered by the AFP S. S FK i csa , = Commission component on annual balance of the mixed commission, expressed in percentage terms, applied by AFP S for the management of pension fund K in month i. S FK i csm , = Commission on monthly balance, expressed in percentage terms, applied by AFP S for the management of pension fund K in month i, defined as:
S
FK i csm
,
= (1
)
1
/360
,
S N
FK i csa
.

For months i=1,2,3…...n, S FK i csa , corresponds to the commission in force in each of the aforementioned months. For months i=n+1, n+2,…24, the annual balance commission in force in month n shall apply, unless the AFP notifies this Superintendency in writing of a change on a certain future date, in which case the application of the new commission shall be subject to the provisions set forth in Article 102 of the Regulation of the TUO of the SPP Law, and may be considered for the calculation referred to in this article.

FK
= Pension fund 0, 1, 2, 3.
0
IPC
= Consumer Price Index of metropolitan Lima for the month of affiliation.

n
IPC
= Consumer Price Index of metropolitan Lima for month n.”

Article Second.- Replace Article 17 of Title III of the Compendium of Regulatory Superintendency Rules of the SPP, approved by resolution No. 053-98-EF/SAFP and amendments, with the following text:

“Article 17.- Functions. The Pension Advisory Offices (OAP) shall have the following functions:

a) Provide guidance to members, employers and the general public regarding the activities and operations carried out by the AFP;

b) Update the status of the member's personal data;

c) Carry out transfers, relocations and/or changes of pension fund;

d) Issue Certificates of Affiliation and SPP Registration Documents (DRSPP);

e) Accept applications for obtaining the Private Security Key (CS);

f) Provide information to the member regarding the balance and movement of their Individual Capitalization Accounts (CIC), as well as issue Account Statements;

g) Carry out enrollment in the service for sending account statements by electronic means;

h) Provide information and/or open a voluntary contribution account;

i) Guide members for the initiation of procedures they must carry out in order to obtain the Recognition Bonus, receiving and verifying the documents and requirements demanded for such purpose;

j) Initiate the procedure for granting retirement, disability and survivor pensions, as well as funeral expenses;

k) Carry out pension projections;

l) Have available to the public informational brochures on the SPP, as well as authorized forms corresponding to the different established procedures;

m) Issue the report detailing capital gains tax withholdings; and,

n) Others determined by the Superintendency.

The OAP must have panels with the denomination "Pension Advisory Office - AFP", clearly detailed, to be correctly identified by members and the general public.”

Article Third.- Replace Article 30 of Title III of the Compendium of Regulatory Superintendency Rules of the SPP, approved by resolution No. 053-98-EF/SAFP and amendments, with the following text:

“Article 30.- Functions. Mobile Posts (PM) shall have the following functions:

a) Provide guidance to members, employers and the general public regarding the activities and operations carried out by the AFP;

b) Update the status of the member's personal data;

c) Carry out transfers, relocations and/or changes of pension fund;

d) Issue Certificates of Affiliation and SPP Registration Documents (DRSPP);

e) Fill out the Recognition Bonus applications of members who so require;

f) Provide information to the member regarding the balance and movement of their Individual Capitalization Accounts, as well as issue Account Statements;

g) Carry out enrollment in the service for sending account statements by electronic means;

h) Provide information and/or open a voluntary contribution account;

i) Prepare pension projections;

j) Make available to the public informational brochures on the SPP, as well as authorized forms corresponding to the different established procedures;

k) Issue the report detailing the capital gains tax withholdings; and,

l) Others authorized by the Superintendency.

The PM must have panels with the denomination "Puesto Móvil AFP", clearly detailed, to be correctly identified by the affiliates and the general public. Additionally, in order to carry out the aforementioned functions, the PM must have adequate standards regarding physical space, furniture and security in the use and processing of information, according to the provisions issued by the Superintendency."

Article Four.- Incorporate the sixth final and transitory provision into Title III of the Compendium of Superintendency Regulatory Norms of the SPP, approved by resolution No. 053-98-EF/SAFP and amendments, under the following text:

"Sixth.- Other functions of the OAP and PM. The AFP may request the Superintendency for authorization to carry out, through their Pension Advisory Offices (OAP) and Mobile Stands, the functions referred to in literals n) and l) of Articles 17 and 30 of this Title, respectively. The authorization issued by the Superintendency shall refer to guidance and/or information provision tasks, as well as improvements in the pension fund administration services provided by the AFP.

Likewise, the AFP may agree, through the guild that represents them, to set up establishments such as those described in this article, jointly, for which purpose they must comply with the authorization requirements provided in articles 19 and 20 of this Title."

Article Five.- This resolution shall enter into force from the day following its publication in the Official Gazette El Peruano.

FINAL AND TRANSITORY PROVISION

SOLE.- The implementation by the AFP of the application referred to in article 17QQ of Title V of the Compendium of Superintendency Regulatory Norms, must be carried out within forty-five (45) calendar days following the publication of this resolution.

Register, communicate and publish.

JAVIER POGGI CAMPODÓNICO
Superintendent of Banking, Insurance and
Private Pension Fund Administrators (a.i.)