Technical Norms for Affiliation to the Pension System

Alameda Juan Pablo II, between 15 and 17 Av. Norte, San Salvador, El Salvador. Tel. (503) 2281-8000 www.bcr.gob.sv Page 1 of 32 CNBCR-11/2022 NSP-57 TECHNICAL NORMS FOR AFFILIATION TO THE PENSION SYSTEM Approval: 12/30/2022 Validity: 12/30/2022

THE COMMITTEE OF NORMS OF THE CENTRAL RESERVE BANK OF EL SALVADOR,

CONSIDERING: I. That by Legislative Decree No. 614, dated December 20, 2022, published in Official Diary No. 241, Volume No. 437, of the 21st of the same month and year, the Comprehensive Pension System Law was issued. II. That article 5 of the Comprehensive Pension System Law defines affiliation as a legal relationship between a natural person and a Pension Fund Administrator, which originates the rights and obligations established by said Law, especially the right to benefits that will take effect upon the generation of contributions, while the obligation to contribute will take effect from the date of validity of the worker's affiliation contract, when there is a labor relationship. Affiliation may be carried out through electronic means made available by the Administrator to the affiliates. III. That article 6 of the Comprehensive Pension System Law provides that all affiliation to the System will be individual and will subsist during the life of the affiliate, whether or not they are in labor activity, and that every person must choose, individually and freely, the Administrator to which they wish to affiliate by signing a contract and opening an Individual Savings Account for Pensions. IV. That paragraphs three and seven of article 6 of the Comprehensive Pension System Law establish that Administrators may not reject the affiliation request of any natural person, if it proceeds in accordance with said Law, and that in no case may the affiliate contribute obligatorily to more than one Administrator. V. That paragraph four of article 6 of the Comprehensive Pension System Law establishes that the Unique Identity Document number will be the identification number in the System, for the operations and payment of contributions thereof. VI. That article 8 of the Comprehensive Pension System Law establishes that affiliation to the System will be mandatory when a person enters into work in a subordinate labor relationship. The person must choose an Administrator and carry out the respective affiliation contract, and every employer will be obliged to respect the choice of the Administrator made by the worker. Otherwise, said employer will be subject to civil and administrative responsibilities derived therefrom. VII. That article 159 of the Comprehensive Pension System Law establishes that the Central Reserve Bank of El Salvador will issue the Technical Norms necessary to allow the development of what is established in said Law.

Alameda Juan Pablo II, between 15 and 17 Av. Norte, San Salvador, El Salvador. Tel. (503) 2281-8000 www.bcr.gob.sv Page 2 of 32 CNBCR-11/2022 NSP-57 TECHNICAL NORMS FOR AFFILIATION TO THE PENSION SYSTEM Approval: 12/30/2022 Validity: 12/30/2022

THEREFORE,

by virtue of the regulatory powers conferred by article 99 of the Law on Supervision and Regulation of the Financial System,

AGREES to issue the following:

TECHNICAL NORMS FOR AFFILIATION TO THE PENSION SYSTEM

CHAPTER I OBJECT, SUBJECTS, AND TERMS

Object Art. 1.- These Norms have as their object to regulate, facilitate, and ensure the application of the provisions of the Comprehensive Pension System Law referred to the affiliation process.

Subjects Art. 2.- The subjects obliged to comply with the provisions established in these Norms are the following: a) Pension Fund Administrators; b) Salvadoran Social Security Institute; and c) Salvadoran Pension Institute.

Terms Art. 3.- For the purposes of these Norms, the terms indicated below have the following meaning: a) Affiliate: Any person who maintains a relationship with a Pension Fund Administrator, through the signing of an affiliation contract; b) AFP: Pension Fund Administrator; c) Agency: Public service locations opened by the AFP within the national territory where they provide services to affiliates, beneficiaries, pensioners, and the general public, in accordance with what is established in the Comprehensive Pension System Law; d) Agent: Pension services agent; e) Central Bank: Central Reserve Bank of El Salvador; f) CGS: Solidarity Guarantee Account; in accordance with article 119 of the Comprehensive Pension System Law, it is the mechanism that assumes the financing and present and future payment of the Minimum Pension and the obligations corresponding to the Pension Institutes of the Public Pension System, with the object of giving sustainability to the payment of pensions, in a stable and lifelong manner; g) CIAP: Individual Savings Account for Pensions; h) Contract: Affiliation contract to an AFP;

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i) Contributions: Contributions that dependent and independent workers and employers make as established in the Comprehensive Pension System Law. Contributions made by pensioned affiliates who continue to contribute to the Pension System will also be considered as contributions; j) Identity Document: Refers to the Unique Identity Document, Minor's Card, Passport, or Resident Card, as applicable; k) DUI: Unique Identity Document; l) Errors: Data of the worker, their employers, or the AFP, which have been incorrectly supplied to the Superintendency of the Financial System due to eventual circumstances outside the control of those involved in the affiliation process; m) History: Individual work history of the affiliate or worker; n) IBC: Contribution Base Income; o) INPEP: National Institute of Public Employees, prior to the entry into force of the Law Creating the Salvadoran Pension Institute; p) Pension Institute: Any of the following Institutions: Salvadoran Social Security Institute or Salvadoran Pension Institute; (1) q) Pension Institution: Any of the following Institutions: Salvadoran Social Security Institute, Salvadoran Pension Institute, or AFP; (1) r) ISP: Salvadoran Pension Institute; s) ISSS: Salvadoran Social Security Institute; t) SAP Law: Law of the Pension Savings System, repealed by Legislative Decree No. 614, dated December 20, 2022, published in Official Diary No. 241, Volume No. 437, of the 21st of the same month and year, in which the Comprehensive Pension System Law was issued; u) SP Law: Comprehensive Pension System Law; v) RNPN: National Registry of Natural Persons; w) SP: Pension System; x) SPP: Public Pension System; and y) Superintendency: Superintendency of the Financial System.

CHAPTER II ON AFFILIATION TO THE SP

Affiliation and incorporation process to the SP Art. 4.- The incorporation of dependent and independent workers to the SP and their affiliation to an AFP will begin with the signing of an affiliation contract. The moment from which all rights and obligations established in the affiliation contract apply to the contracting parties will be from the date on which the Superintendency notifies the validity of the request, in accordance with article 8 of these Norms. Art. 5.- The affiliation process will be carried out in person or by electronic means, in accordance with what is provided in the SP Law and the internal procedures established in each AFP. The affiliation request and contract must comply with what is established in Annexes No. 1 and No. 2 of these Norms. In the case that twenty days have elapsed since the start of a labor relationship and the worker is still not affiliated to an AFP, the Employer must carry out their affiliation through the means facilitated by the AFPs, in accordance with what is established in paragraph three of article 8 of the SP Law. (3) Art. 6.- The AFP, within a period not exceeding 5 days after the presentation of the request and the affiliation contract duly completed, must send to the Superintendency the information detailed in Annex No. 5 of these Norms.

Transfer of information between the Superintendency and Pension Fund Administrators Art. 7.- The information transfer process will begin with the worker's affiliation request to the AFP and the subsequent incorporation to the SP. The request to the Superintendency is made by the AFP through the electronic sending of the data contained in said request and affiliation contract. The information required for each information transfer is detailed in Annex No. 5 of these Norms. Art. 8.- The Superintendency, once the information sent by the AFP is received, will process the requests within a period not exceeding three business days. Subsequently, the Superintendency will notify the AFP of the validity of the request or any inconsistency detected, the grounds, and the reason that gave rise to it.

On the Identity Document Art. 9.- The DUI will be the identification number in the Pension System, for which the RNPN must share in real time and monthly, free of charge, the database of DUIs with the Superintendency, the AFPs, and the Pension Institutes, ensuring the confidentiality, integrity, and update of the same, in accordance with what is established in paragraphs four and five of article 6 of the SP Law. (1) Notwithstanding the above, the Identity Document for foreigners and minors will be the residence card, passport, or minor's card, as applicable. Art. 10.- The Identity Document, which the Superintendency and the AFPs will require as indispensable data for the granting of the affiliation contract with a worker, will be the identification document presented.

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Affiliation request and contract Art. 11.- The affiliation request and contract will be contained in a single form divided into two parts, corresponding to each of them, and must contain relevant information on the rights and obligations that the SP Law establishes. Such forms must be available in print or by electronic means, will have consecutive numbering, and must contain as a minimum the information established in Annexes No. 1 and No. 2 of these Norms. Art. 12.- For a person to request their affiliation to the SP, they must fill out the request, completing all the required information and attaching a copy of their Identity Document. If it is a pensioner of the SPP or who has received an assignment in said system, who is working in a subordinate labor relationship, the Agent must record the data of their employer in the space provided for such effect on the form and identify that it corresponds to a pensioner for old age of the SPP. (1) Likewise, in the case of re-affiliation, the agent must identify it in the form, in the corresponding space. (1) Art. 13.- For the request to be considered valid, in cases where the forms are filled out manually, the participation of an Agent will be required. Said Agent will act on behalf of the AFP and will only be responsible for the information recorded in the form. The form will not take effect if it includes information that does not correspond or omits part of it. The Agent who incurs in such anomaly will be sanctioned in accordance with the SP Law. In the case that the person cannot read or write, it will be necessary that the digital fingerprint of any finger of either hand is printed on the form, and if it is not possible, the Agent must point it out and record such circumstance in the respective form. Art. 14.- In the case that the request form is filled out by hand, it must not contain smudges, erasures, or any other alteration. In the case that the form contains errors in its content, they can be saved as amendments, recording it within the observations box of said form, and must be signed immediately after the amendments, both by the Agent and by the affiliate, or the proxy signer in the case that the person cannot sign. Affiliation may also be carried out through electronic means made available by the AFP to the affiliates, for which authentication mechanisms must be followed and record of consent to the terms of the affiliation contract must be left by the affiliate. Art. 15.- When a person has more than one employer, such situation must be recorded by the Agent in the observations space that the request will have. Art. 16.- The affiliation request must be signed, both by the applicant and by the Agent, and the affiliation contract will be signed immediately after the request, only by the interested party. The affiliation contract must contain only two blank fields corresponding to the signature of the person authorized by the AFP and the date of granting thereof. Art. 17.- The date on which the Superintendency notifies the validity of the request will be considered the date of incorporation to the SP and affiliation to the first AFP. On that date, the person authorized by the Board of Directors of the AFP to sign contracts, must grant the respective Affiliation Contract, signing it and completing the date of granting, proceeding to register it in the affiliate's file. Art. 18.- Within the period of ten business days counted from the day following the receipt of the notification of validity of the affiliation request by the Superintendency, the AFP will proceed to send copies of the Contract to their respective recipients duly signed by the person authorized by the Board of Directors of the AFP to sign contracts. The AFP will be responsible for the timely delivery of the copies of the Contract to them. In cases where there is more than one employer, the AFP will be obliged to notify each of the employers of such circumstance, delivering to each of them a copy of the contract, which may be in electronic form or a simple copy. Art. 19.- In cases where the Superintendency has declared that the request is not valid, the AFP must make it known to the applicant; for which they will have a period of ten business days, counted from the day following the notification received. Art. 20.- In case of loss of the copies of the Contract by the affiliate, they may request a copy thereof, to the corresponding AFP, which must be stamped with the word . In any case, the AFPs will be responsible for the information corresponding to the general data and history of each affiliate, which they must keep safeguarded both in electronic and documentary media.

Pension affiliation card Art. 21.- The pension affiliation card is a document that may be delivered by the AFP to its affiliates after carrying out the affiliation process. This must contain as a minimum the full name of the affiliate, number of Identity Document, date of incorporation to the SP, and date of affiliation to the AFP, the latter in case the affiliate has transferred from an AFP.

Affiliate database Art. 22.- The Affiliate database is a set of electronic files containing the general data and history of each affiliate within the SP and the SPP. This database must be created and updated by the AFP, and each movement must have the proofs that support it in due form. This information must be accessible in real time to the Superintendency, independently of the information sent through the Validator and Receiver of Information of the Central Pension Base called VARE BCPE. In case that an affiliate transfers from one AFP to another, the records corresponding to the history of each affiliate must be transferred to the destination AFP, for incorporation into its affiliate database. Art. 23.- The Superintendency, in compliance with what is established in article 21 of the SP Law, will maintain a central database of affiliates, which will be fed with the information sent by the AFPs in the affiliation process, transfers, and changes of information. Likewise, each AFP must facilitate access to the Superintendency to the information detailed in Annex No. 3 of these Norms.

Update of information Art. 24.- Any Affiliate or their employer may request the AFP for an update of the Identity Documents or changes to the identification data that served for their incorporation and/or affiliation to the SP, for which they must present the documentation that supports the requested change. (1) The AFP will be responsible for verifying the documentation that supports the requested change, and if valid, must communicate it to the affiliate and to the Superintendency, within a period of three business days, incorporating it into the file and updating the affiliate's database. In case that the AFP considers that the changes requested by the affiliate are not sufficiently founded, it must notify them, within a period not exceeding ten business days. Art. 25.- The AFP will be obliged to attend to the requests for changes of information of the affiliates, for which it must make available to them the respective forms through their Agencies or by electronic means. Art. 26.- Any change of information of the identification data that served for their affiliation to the SP, must be reported by the AFPs to the Superintendency, which must be available to said Superintendency to be consulted online. The manner in which requests for changes of information must be attended will be in accordance with the internal procedures of each AFP.

Request for annulment of the affiliation contract Art. 27.- The persons affiliated to the SP and to the Pension Institutions, where applicable, may request that a contract be voided, through a request that they will present directly to the Superintendency. Said request must be available to the public in the agencies of the AFPs or through their agents, in print or by electronic means, and must contain as a minimum the information described in Annex No. 4 of these Norms.

Grounds for annulment of the affiliation contract Art. 28.- A Contract will be voided, when so declared by the Superintendency, in any of the following cases: a) For having been signed by a person who, in accordance with the SP Law, should not incorporate to the SP; b) For having been signed by a person declared judicially as incapable prior to the signing of the contract, in accordance with the corresponding laws; c) For not containing the minimum information required in Annex No. 1 of these Norms; d) For containing erasures, smudges, or amendments that have not been saved and do not have the signatures that sign them immediately after, in the case of physical forms; e) For having been proven that the handwritten or electronic signature of the worker, as the case may be, has been forged, or that the digital fingerprint has been impersonated or altered; f) When an affiliate has signed more than one contract, the first contract signed will prevail over the others, regardless of whether the affiliate has made contributions; g) When an affiliation contract has been signed with an Agent not registered in the corresponding Public Registry; and h) When it is proven that the opted affiliates did not register any contribution. Art. 29.- The Superintendency, within a period of up to twenty business days after the presentation of the request referred to in article 27 of these Norms, will gather ex officio the information and proofs provided or necessary for the effect; all with hearing to the involved AFP and subsequently will issue the corresponding resolution, within the same period. Art. 30.- In case that the Superintendency resolves to void an Affiliation Contract for the grounds established in letters c), d), e), and g) of article 28 of these Norms, the worker must sign a new affiliation contract with the AFP of their choice, within a period of thirty business days, from the day following the notification of the result of the Resolution issued thereon. If after said period the worker has not chosen the AFP, their employer will be obliged to affiliate them in the AFP in which the greatest number of workers are affiliated.

CHAPTER III INCORPORATION OF NON-RESIDENT SALVADORANS TO THE PENSION SYSTEM

Affiliation of non-resident Salvadorans Art. 31.- Non-resident Salvadorans may affiliate to the SP by contributing to their CIAP to access a benefit in accordance with what is established in letter a) of article 32 of these Norms. The affiliation to the SP of non-resident Salvadorans will be as independent workers. The interested party will fill out the request and the affiliation contract in accordance with what is esta