Technical Standards for Permanence in the Public Pension System

Alameda Juan Pablo II, between 15 and 17 Norte Avenue, San Salvador, El Salvador. Tel. (503) 2281-8000 www.bcr.gob.sv Page 1 of 26 CNBCR-01/2023 NSP-81 TECHNICAL STANDARDS FOR PERMANENCE IN THE PUBLIC PENSION SYSTEM Approval: 01/26/2023 Validity: 01/26/2023

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

CONSIDERING: I. That by Legislative Decree No. 614, of December 20, 2022, published in the Official Journal No. 241, Volume No. 437 of December 21 of the same year, the Integral Pension System Law was approved. II. That Article 149 of the Integral Pension System Law establishes that the Public System, which includes the Pension Unit of the Salvadoran Institute of Social Security and the Salvadoran Institute of Pensions, must provide benefits in accordance with said Law and its own creation laws. III. That Article 159 of the Integral Pension System Law establishes that the Central Reserve Bank of El Salvador will issue the Technical Standards necessary to allow the development of what is established in said Law.

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 STANDARDS FOR PERMANENCE IN THE PUBLIC PENSION SYSTEM

CHAPTER I OBJECT, SUBJECTS, AND TERMS

Object Art. 1.- These Standards aim to regulate the procedures for the permanence of affiliates in the Public Pension System, according to their age, and those who voluntarily opt for their permanence in it.

Subjects Art. 2.- The subjects obliged to comply with the provisions established in these Standards are the following: a) Salvadoran Institute of Social Security; and b) Salvadoran Institute of Pensions.

Terms Art. 3.- For the purposes of these Standards, the terms indicated below have the following meaning: a) Affiliate: Worker enrolled in one of the Disability, Old Age, and Death Regimes, administered by the Salvadoran Institute of Social Security, the National Institute of Pensions for Public Employees, or the Salvadoran Institute of Pensions, who participated or participates in the financing of one or both Regimes, through contributions; b) Central Bank: Central Reserve Bank of El Salvador; c) CCI: Disability Assessment Commission; d) Identity Document: It may be the Unique Identity Document, Minor's Card, Passport, or Resident Card, as applicable; e) INPEP: National Institute of Pensions for Public Employees prior to the entry into force of the Law creating the Salvadoran Institute of Pensions; f) Pension Institute: Salvadoran Institute of Social Security or Salvadoran Institute of Pensions; g) ISSS: Salvadoran Institute of Social Security; h) SP Law: Integral Pension System Law; i) IVM Regime: Disability, Old Age, and Death Regime, administered by the ISSS or by the INPEP; j) SAP: Pension Savings System; k) SPP: Public Pension System; and l) Superintendency: Superintendency of the Financial System.

CHAPTER II ON MANDATORY PERMANENCE

Art. 4.- Affiliates in the ISSS or INPEP who had reached fifty-five years of age or more, men, and fifty years of age or more, women, at the time the SAP entered into operation, will remain automatically affiliated in the SPP. If they are private sector employees, they will remain affiliated in the ISSS, and if they are public or municipal sector employees, in the INPEP. Likewise, those pensioned for old age and permanent disability due to common risks will remain in the SPP.

Art. 5.- Workers in any of the Pension Institutes who must remain affiliated with the SPP shall not need to fill out an application to make their permanence effective; this will be automatic.

Art. 6.- The mandatory permanence in the SPP applies to all affiliates indicated in Article 4 of these Standards, regardless of whether they were contributing or not on the date the SAP entered into operation.

CHAPTER III ON VOLUNTARY PERMANENCE

Art. 7.- Affiliates in the SPP who had completed thirty-six years of age and were under fifty-five years of age, men, and under fifty years of age, women, on the date the SAP entered into operation, may opt to remain affiliated with the SPP or to join the SAP. To do so, they must manifest their desire to remain in the SPP within a period of six months, counted from the date the SAP enters into operation.

Likewise, affiliates declared with total or partial disability due to common risks by a first ruling issued by the CCI may opt to remain in the SPP. In these cases, if the affiliate is under thirty-six years of age, they must fill out the permanence application and remain affiliated with the SPP while the CCI does not rule on the recovery from disability; otherwise, they must affiliate with the SAP, regardless of the date recovery occurs. If the affiliate is thirty-six years of age or older and under fifty years for women and fifty-five for men, they must fill out the permanence application and remain affiliated with the SPP while the CCI does not rule on the recovery from disability, being able to affiliate with the SAP provided they have manifested this in their permanence application.

The first paragraph of this article also applies to affiliates in the ISSS or INPEP who were not contributing. If they do not manifest their desire to remain, upon re-entering subordinate employment, they must join the SAP.

On the Permanence Application in the SPP Art. 8.- Permanence in the SPP is materialized with the signing of the permanence application, which becomes effective with the granting of the identification number by the Superintendency, through the Identity Document presented by the affiliate.

Art. 9.- To request permanence in the SPP, the affiliate must fill out, sign, and present the application to the institution where they last contributed. If the affiliate is contributing to both Pension Institutes, they may go to either one. This application must be available to the affiliate in the offices of the Pension Institutes or through electronic means defined by them for such purposes.

The application must be presented in original and two copies, with the addressee indicated on each. The original will remain with the corresponding Institute; the first copy for the affiliate; and the second copy will be sent to their employer. The Pension Institute must review the permanence application, with the purpose of approving it or, in its defect, correcting it jointly with the affiliate.

The minimum content of the application must be as follows: a) Logo and full name of the Pension Institute; b) Title of the application in question; c) Sequential number of the application; d) Subject of the application; e) Affiliate identification: i. Affiliate's name; ii. Sex; iii. Date of birth; iv. ISSS or INPEP number or both, where applicable; v. Nationality; vi. Address; vii. Marital status; viii. Type of identity document; ix. Identity document number; x. Phone and email. f) Affiliate's situation; i. Labor situation; ii. Labor status; iii. Simultaneous contribution for the IVM Regime; iv. Date of unemployment, in cases of being unemployed. g) Employer data: i. Name or corporate name; ii. Sector to which they belong; iii. Date of start of work with the employer; iv. Employer's Tax ID (NIT); v. Address, phone, and email. h) Beneficiary group data: i. Beneficiary's name; ii. Kinship; iii. Date of birth. i) Space reserved for affiliates with Disability by First Ruling: i. Legend "If I recover from the disability"; ii. Date of the first ruling; iii. Date when the second ruling will be held; iv. Signature. j) Affiliate's signature; k) Signature of the person designated by the Pension Institute to process the application.

Art. 10.- In case the affiliate has two or more employers, they will be obliged to deliver, to each employer, a copy of the Application presented to the Pension Institution. If the affiliate was contributing simultaneously to the ISSS and the INPEP, it will be sufficient to present the Application in one of them. The receiving Institution must communicate this circumstance to the other institution. In any case, it must send a copy of the permanence application, as prescribed in the first paragraph of this article, within a period not exceeding three business days.

Art. 11.- The Pension Institute, within a maximum period of three business days after the permanence application is signed, must request the corresponding identification number from the Superintendency, according to the Identity Document presented by the affiliate, for which it must send the information electronically, as established in Annex No. 1 of these Standards.

Art. 12.- The Superintendency will have a period of three business days after receiving the information, to assign the corresponding identification number, according to the Identity Document presented by the affiliate, and notify the respective Pension Institute confirming that their permanence in the SPP proceeds. If the Superintendency considers an application inadmissible, it will inform the Pension Institute of the reason for inadmissibility. The confirmation of permanence in the SPP takes effect from the day of the assignment of the identification number by the Superintendency.

Art. 13.- The Pension Institutes of the SPP, within a period of three business days counted from the day following the receipt of the identification number, must register it in the original permanence application and in the employer's copy.

Art. 14.- In cases of inadmissibility of a permanence application in the SPP, the Pension Institute, within a period of three business days counted from the receipt of the inadmissibility notification, must communicate this to the affiliate so that they correct the error for which their permanence application was rejected or notify them that their permanence in the SPP does not proceed.

CHAPTER IV ON LATE PERMANENCE APPLICATIONS

Art. 15.- When an affiliate reaches the legal age of old age, becomes disabled, or dies, without having exercised their right to opt for one of the two pension systems; or when, being an affiliate of a Pension Administrator, their affiliation contract is cancelled and they must rejoin the SPP, they must sign a late permanence application in said System.

Likewise, the Superintendency may authorize the signing of a late permanence application when, according to considerations expressed by the affiliate or beneficiary, it deems it appropriate.

Art. 16.- The affiliates referred to in Article 15 of these Standards (or their beneficiaries in case of the affiliate's death) must appear at the Pension Institute where they last contributed, to request, fill out, sign, and present the Late Permanence Application.

This application must be available to the affiliate in the offices of the Pension Institutes or through electronic means defined by them for such purposes.

The minimum content of the application must be that established in Article 9 of these Standards, except for letter i).

Art. 17.- The Pension Institute, within a maximum period of three business days after the permanence application is signed, must request the corresponding identification number from the Superintendency, according to the Identity Document presented by the affiliate, for which it must send the information electronically, as established in Annex No. 1 of these Standards.

Art. 18.- The Superintendency will have a period of three business days after receiving the information, to assign the corresponding identification number, according to the Identity Document presented by the affiliate, and notify the respective Pension Institute confirming that their permanence in the SPP proceeds. If the Superintendency considers an application inadmissible, it will inform the Pension Institute of the reason for inadmissibility.

Art. 19.- The Pension Institutes of the SPP, within a period of three business days counted from the day following the receipt of the identification number, must register it in the original late permanence application.

Art. 20.- In cases where the Superintendency finds the application inadmissible, it will inform the corresponding Pension Institution, indicating the cause. For this, it will have a period of three business days from the receipt of the respective information. The Pension Institute in these cases, within a period of three business days from the receipt of the inadmissibility notification, must communicate this to the affiliate so that they correct the error for which their permanence application was rejected or notify them that their permanence in the SPP does not proceed.

CHAPTER V ON APPLICATION FOR CHANGE OF INFORMATION AND COMPLAINTS OR DENUNCIATIONS

On the Affiliate's Information Art. 21.- Any affiliate may request the ISSS or INPEP, as applicable, the update or change of their personal data or that of their beneficiaries, by filling out the corresponding application, with the original for the Pension Institute and the copy for the affiliate, attaching the documentation supporting said change.

The Pension Institution will analyze the documentation presented by the affiliate or their employer and verify the admissibility or inadmissibility of the requested change.

Art. 22.- The Pension Institute must consider if the change is admissible, updating the information in the corresponding files and must keep the documentation supporting the change in the affiliate's documentary file, having a period of up to five business days from the receipt of said application.

Art. 23.- If the change of information is considered inadmissible, the Pension Institute must notify the interested party within a period not exceeding five business days after the presentation of the application; if they are not satisfied with the resolution, they may file a complaint as established in Article 26 of these Standards.

Art. 24.- When the Pension Institutes detect errors in the data entry of the information sent for the assignment of the identification number of an affiliate and possess the documentation supporting them, they may request changes of information without direct request from the affiliate.

Application for Change of Information Art. 25.- The minimum content of the application for change of information must be as follows: a) Logo and full name of the Pension Institute; b) Title of the application in question; c) Sequential number of the application; d) Date of the application; e) Affiliate identification: i. Affiliate's name; ii. Date of birth; iii. Type of identity document; iv. Identity document number; v. Phone and email. f) Detail of the changes of information to be made, some of which may be: i. Affiliate's name; ii. Marital status; iii. Name of beneficiaries, kinship, and date of birth; iv. Address (country, department/state, municipality/district/city); (1) v. Nationality; vi. Phone and email; vii. Labor status; viii. Type of identity document; ix. Identity document number; x. Date and place of issuance of the identity document; xi. Data of the new employer; xii. Data of the new independent affiliate. g) Affiliate's signature.

This application must be available to the affiliate in the offices of the Pension Institutes or through electronic means defined by them for such purposes.

On the Affiliate's Complaints Art. 26.- The affiliate wishing to file a complaint with the ISSS or INPEP must present the complaint or denunciation application to the corresponding Pension Institute.

The corresponding Pension Institute will gather other evidence if deemed necessary and present to the Superintendency the final report of the case investigation, no later than thirty business days from the date the complaint was presented.

The Superintendency will issue a resolution on the complaint and notify the interested parties within twenty business days from the presentation of the final report by the ISSS or INPEP. If deemed necessary, it may request more information or documentation; in this case, the period will start from the day of receipt of the information by the Superintendency.

If the affiliate who presented the complaint is not satisfied with the resolution issued by the Superintendency, they may file an appeal for rectification, within a maximum period of three business days from the notification by the Superintendency.

If a complaint is qualified as a denunciation, the investigation will proceed accordingly.

Application for Complaint or Denunciation Art. 27.- The minimum content of the application for complaint or denunciation must be as follows: a) Logo and full name of the Pension Institute; b) Title of the application in question; c) Sequential number of the application; d) Date of the application; e) Identification of the natural person presenting the complaint: i. Name; ii. Type of identity document; iii. Identity document number; iv. ISSS or INPEP number or both, where applicable; v. Address; vi. Phone and email. f) Identification of the legal person presenting the complaint: i. Name or corporate name; ii. Tax ID (NIT); iii. Address; iv. Phone and email. g) Cause of the complaint, which may be the following: i. That in accordance with legal provisions, the affiliate must remain in the SPP; ii. The permanence application was not signed on the authorized form; iii. The permanence application, if physical, contains strikethroughs and these have not been validated; iv. The affiliate's signature was forged; v. The affiliate presented false documentation or information; vi. Others. h) Type of document of the affiliate involved; i) Identity document number of the affiliate involved; j) Affiliate's signature.

CHAPTER IV OTHER PROVISIONS AND VALIDITY

Technical Details of Information Submission Art. 28.- The Superintendency will send to the Pension Institutes, with a copy to the Central Bank, the technical details related to the submission of information required in these Standards, which will be communicated within a maximum period of sixty days after the entry into force of these Standards. The information requirements will be limited to the collection of information as regulated in these Standards.

The Pension Institutes must implement the necessary mechanisms for the submission of information within a maximum period of sixty days, counted from the date of having received the technical details from the Superintendency referred to in the first paragraph of this article.

Sanctions Art. 29.- Non-compliance with the provisions contained in these Standards will be sanctioned in accordance with what is established in the Law on Supervision and Regulation of the Financial System.

Repeal Art. 30.- These Standards repeal the (SPP-01/98) approved on April 3, 1998 by the Superintendency of Pensions, whose Organic Law was repealed by Legislative Decree No. 592 containing the Law on Supervision and Regulation of the Financial System, published in the Official Journal No. 23, Volume No. 390, dated February 2, 2011.

Transitory Art. 31.- The Pension Institutes will have a period of 90 days to make the corresponding adjustments related to the substitution of the Unique Pension Number by the Identity Document Number in Systems, forms, or others where such change applies.

Unforeseen Aspects Art. 32.- Aspects not provided for in regulatory matters in these Standards will be resolved by the Central Bank, through its Committee of Norms.

Validity Art. 33.- These Standards will enter into force from the twenty-sixth of January two thousand twenty-three.