Technical Standards for the Granting of Disability Benefits in the Pension System

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THE COMMITTEE OF STANDARDS OF THE CENTRAL BANK OF RESERVE 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, 2022, the Comprehensive Law of the Pension System was issued, by which the Pension System for workers in the private, public, and municipal sectors was created, which comprises the set of norms and measures that Pension Fund Administrators will apply.

II. That article 2, letter a) of the Comprehensive Law of the Pension System establishes that the System will have the characteristic that its affiliates will have the right to the granting and payment of disability pensions, which is determined in the aforementioned Law.

III. That article 99 of the Comprehensive Law of the Pension System establishes that non-pensioned affiliates who, without meeting the age requirements to access old-age pension, suffer a reduction in the capacity to exercise any work, as a consequence of illness, common accident, or weakening of their physical or intellectual forces, shall have the right to a disability pension, not so those who become disabled due to professional risks.

IV. That article 101 of the Comprehensive Law of the Pension System establishes that, for the payment of disability pensions, the pension will be determined as a percentage of the Regulated Basic Salary in the aforementioned Law. Additionally, it establishes that the disability pension cannot be lower than the minimum pension established in the referenced Law.

V. That article 114 of the Comprehensive Law of the Pension System establishes the minimum pensions for the System.

VI. That article 159 of Legislative Decree No. 614, by which the Comprehensive Law of the Pension System was approved, establishes that the Central Bank of Reserve of El Salvador will issue the Technical Standards and Resolutions necessary to allow the development of what is established in the referenced Law.

THEREFORE,

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

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AGREES to issue the following:

TECHNICAL STANDARDS FOR THE GRANTING OF DISABILITY BENEFITS IN THE PENSION SYSTEM

CHAPTER I OBJECT, SUBJECTS, AND TERMS

Object Art. 1.- The object of these Standards is to establish the procedures that Pension Fund Administrators must carry out for the granting of disability benefits in accordance with what is established in the Comprehensive Law of the Pension System.

Subjects Art. 2.- The subjects obliged to comply with the provisions established in these Standards are the Pension Fund Administrators.

Terms Art. 3.- For the purposes of these Standards, 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) Non-pensioned Affiliate: Affiliate who is not receiving a pension from the Pension System in accordance with the Comprehensive Law of the Pension System; c) Pensioned Affiliate: Affiliate to the Pension System who receives a pension in a Pension Fund Administrator; d) AFP: Pension Fund Administrator; e) 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 Law of the Pension System; f) Contribution Years: Time accumulated by contributions made in the Pension System. A contribution year will be understood as equivalent to 365.25 days; g) Central Bank: Central Bank of Reserve of El Salvador; h) CIAP: Individual Savings Account for Pensions; it is the sum of the worker's mandatory contributions and the proportion corresponding to the employer's contribution and the earnings credited. Additionally, any other contribution established for specific cases, provided they meet the requirements of the Comprehensive Law of the Pension System, will form part of the Individual Savings Account for Pensions; i) CGS: In accordance with article 119 of the Comprehensive Law of the Pension System, it is the mechanism that assumes the present and future financing and payment of the Minimum Pension and the obligations corresponding to the Pension Institutes of the Public Pension System, with the objective of giving sustainability to the payment of pensions, in a stable and lifelong manner; j) Qualifying Commission for Disability: Entity created by article 104 of the Comprehensive Law of the Pension System that enjoys autonomy regarding the knowledge and qualification of the applications submitted to its consideration, whose main function is to determine the origin of the illness or common or professional accident and qualify the degree of disability. Likewise, it rules on whether an affiliate suffers from a serious illness to access the benefit of balance return for serious illness as regulated in article 128 of the Comprehensive Law of the Pension System; k) CT: Transfer Certificate or its equivalent value; l) Days: When used for a period, it shall be understood that it refers to calendar days; m) Disability Report: Expert report containing the agreements of the Qualifying Commission for Disability constituted in session, regarding a request for disability evaluation: i. First Report: Agreement of the Qualifying Commission for Disability that determines the impairment in functional capacity presented by an affiliate or beneficiary to perform remunerated work; ii. Second Report: Agreement of the Qualifying Commission for Disability that ratifies or modifies the impairment determined in the first report; and iii. Another report: Agreement of the Qualifying Commission for Disability regarding a new request for evaluation due to aggravation or improvement of disability, after a second report of partial or total disability has been issued. n) Executed Report: Report issued by the Qualifying Commission for Disability regarding which fifteen business days have elapsed after notification to the parties, without a claim having been received against it, or that having a claim been presented, it has been resolved by the Qualifying Commission for Disability; o) Identity Document: It may be the Unique Identity Document, Minor's Card, Passport, or Resident Card, as appropriate; p) Retirement Age: Age reached that enables an affiliate to opt for an old-age benefit, in accordance with what is established in article 96 of the Comprehensive Law of the Pension System; q) FSV: Social Housing Fund; r) ISSS: Salvadoran Social Security Institute; s) Disabled: Affiliated worker who, as a consequence of a physical and/or intellectual impediment of common origin in accordance with article 99 of the Comprehensive Law of the Pension System, suffers a reduction in work capacity; t) Partially Disabled: Affiliated worker who, as a consequence of a physical and/or intellectual impediment of common origin, suffers a reduction in work capacity equal to or greater than fifty percent and less than two thirds;

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u) Totally Disabled: Affiliated worker who, as a consequence of a physical and/or intellectual impediment of common origin, suffers a reduction in work capacity of at least two thirds, including great disability which considers the need for assistance by third parties for the basic care of the daily life of the disabled person; v) SP Law: Comprehensive Law of the Pension System; w) INPEP Affiliation Number: Number granted by the National Institute of Pensions of Public Employees to its affiliates, prior to the entry into force of the Law Creating the Salvadoran Institute of Pensions. x) Disability Pension: It is the monetary benefit granted to non-pensioned affiliates of the Pension System who suffer a reduction in the capacity to exercise any work, as a consequence of illness, common accident, or weakening of their physical or intellectual forces; y) Partial Disability Pension: It is the monetary benefit granted to an affiliate declared by the Qualifying Commission for Disability as partially disabled; z) Total Disability Pension: It is the monetary benefit granted to an affiliate declared by the Qualifying Commission for Disability as totally disabled; aa) Partial Permanent Pensioner: Affiliate pensioned for partial disability, according to the qualification of the second disability report, by the Qualifying Commission for Disability; bb) Total Permanent Pensioner: Affiliate pensioned for total disability, according to the qualification of the second disability report, by the Qualifying Commission for Disability; cc) Benefits: Set of obligations of the AFP and the CGS established in accordance with the SP Law, regarding the granting of benefits to their affiliates, insured persons, and beneficiaries; dd) SP: Pension System; ee) SBR: Regulated Basic Salary; ff) Superintendence: Superintendence of the Financial System; and gg) UAIHL: Comprehensive Attention Unit of the Labor History.

CHAPTER II DISABILITY BENEFITS

Disability Benefits Art. 4.- Non-pensioned affiliates, who without meeting the age requirements to access old-age pension and who are qualified with a reduction in the capacity to exercise any work, as a consequence of illness, common accident, or weakening of their physical and/or intellectual forces, may have the right to a disability pension, in accordance with what is established in article 99 of the SP Law. In the event that voluntary contributions were made to their CIAP prior to the entry into force of the SP Law, they will be returned from the first disability report, in accordance with what is stipulated in article 6 of the "Technical Standards for the Granting of Old-Age Benefits in the Pension System" (NSP-43), approved by the Central Bank, through its Committee of Standards. (2)

Art. 5.- The benefits to which disabled affiliates can access, in accordance with what is established in the SP Law, are the following: a) Partial disability pension; b) Total disability pension; or c) Balance return, in accordance with what is established in article 123 of the SP Law.

Requirements to access a disability pension Art. 6.- Non-pensioned affiliates who become disabled due to common risk, for the purposes of accessing the enjoyment of a partial or total disability pension, must meet the following requirements: a) Not having the legal age to retire for old age; and b) Being diagnosed by the Qualifying Commission for Disability as disabled due to common risk; Additionally, they must meet any of the following requirements: a) Three years of continuous or discontinuous contributions, registered during the five years prior to the date on which they were declared disabled by a first report; b) Being contributing at the moment the disability was declared in case of accident or common illness, or having contributed at least six months during the last twelve and the accident or common illness having occurred after their affiliation; or c) Registering a minimum of ten years of effective contributions on the date of becoming disabled, or subsequently if it is a pensioner for disability who continues to contribute. For the purpose of calculating contribution time, the AFP must sum the number of days credited in each contribution month and divide that total by 365.25. The figure of the hundredths will be rounded to the immediate higher figure when the figure of the thousandths is equal to or greater than five and the resulting year fractions will be taken into account with two significant figures, up to the fraction 0.99 inclusive, then the next higher figure will be used.

Disability due to professional risks Art. 7.- The disability benefits due to professional risks will be covered through the Health, Illness, and Professional Risks Regime of the ISSS or by the Salvadoran Institute of Teacher Welfare, as appropriate, who will determine the appropriateness or not of granting the benefit in accordance with their respective Laws and Regulations.

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CHAPTER III OF THE APPLICATION FOR DISABILITY BENEFITS

Art. 8.- The affiliate who suffers a reduction in the capacity to exercise any work, as a consequence of illness, common accident, or weakening of their physical and/or intellectual forces, must present to the AFP in which they are affiliated the application to the Qualifying Commission for Disability, for the evaluation of disability, in accordance with the procedure established in the "Technical Standards for the Qualification of the Degree of Disability and Determination of Serious Illness to Rule on the Right to Disability Pension and Balance Return for Serious Illness by the Qualifying Commission for Disability" (NSP-45) issued by the Central Bank through its Committee of Standards. Simultaneously with requesting the qualification of disability by first report, the affiliate must present to the AFP the application called "Application for Disability Benefits," in which a legend must be established indicating that such application will proceed in the case that the affiliate is diagnosed as disabled due to common risk. If on the date of presenting the application for disability benefits, the affiliate will meet the legal age of old age within the next two months, they must sign the Disability Pension Application together with the advanced second report application, which must contain a clarifying legend of the reason why the advanced second report application is being presented. The AFP must verify compliance with the requirements and determine the disability benefit that corresponds to the affiliate.

Art. 9.- The application to initiate the disability benefits procedure must be available to affiliates, through the agencies and electronic means that the AFPs make available to them. Any affiliate who wishes to access any of the disability benefits by first report must initiate the procedure with the signing of the corresponding application. In the event that the affiliate is unable to perform this procedure personally, they may be represented by an attorney. In case of appearing through an attorney, this must present their Identity Document and a power of attorney with a special clause to process the application for disability benefits.

Content of the disability benefits application Art. 10.- The application for disability benefits must contain as a minimum the following information:

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a) Logo and full name of the AFP; b) Name of the application or form in question; c) Number of the application or form, as appropriate; d) Affiliate data: i. Name of the affiliate; ii. Sex of the affiliate; iii. Number of affiliation to the ISSS or INPEP, or both as appropriate; iv. Marital status; v. Nationality; vi. Identity Document used, indicating the document number, place and date of issuance; and vii. Full address. e) Affiliate situation: i. Labor relationship (dependent contributor, independent, or unemployed); f) Place and date of presentation of the application; g) Signature of the applicant; and h) Stamp and signature of the employee authorized by the AFP to receive the application. The AFP must keep the original and a copy of the application and deliver a copy to the affiliate. In the event that the application is presented by physical means, these must not contain erasures, strikethroughs, or any other alteration of the same.

Documents attached to the application Art. 11.- The application must be accompanied by the following documents: a) Original and copy of Identity Document; (4) b) Document of affiliation to the ISSS or INPEP, or both if they have them; and (4) c) Certification of birth certificate of the affiliate, only in the case that there is doubt about the identity of the affiliate or their civil status, for the purpose of confirming the same, which must be issued no more than six months prior. (4) The AFP, for the process of receiving applications, may make electronic means available to the affiliate; however, such application will be formalized with the signature of the affiliate presenting their Identity Document for this purpose. In case of appearing through an attorney, this must present their Identity Document and a power of attorney with a special clause to process the application for disability benefits. The identity documents established in letter a) of the present article must be valid on the date of the application, which must be presented both originals and legible copies in good condition, this for the purpose of carrying out the corresponding validation. In the case that for the performance of the procedure the original documents are not available because the affiliate is outside the country, or performs the procedure through an attorney, certified copies may be presented. (4) In the cases where the disabled affiliate is incapacitated to sign, another person may sign on their behalf, for which the latter must present a copy of the Identity Document, Resident Card or Passport, in case of being a foreigner or non-resident Salvadoran.

Of the review of the documents Art. 12.- The AFP will verify at the moment of receiving the application the content and the documents accompanying it and the compliance with the requirements to opt for a disability benefit in accordance with what is established in these Standards.

Art. 13.- If the application for disability benefits does not meet the requirements established in the SP Law and in these Standards, the AFP will inform the affiliate in order to present the documentation in due form. If the documentation presented by the affiliate again does not meet the aforementioned conditions, the AFP will indicate that the start of the disability benefits procedure will be until they present all the documents in due form. Upon receiving the disability benefits application in proper form, the AFP will proceed to verify compliance with the requirements established in the SP Law to access a disability benefit.

Labor History Art. 14.- If the AFP identifies that the non-pensioned disabled affiliate might have contributions in the SPP, it must provide adequate advice so that this person can initiate the corresponding procedures for the review of the Contribution History at the SPP, assigning them an appointment at the UAIHL; this process will end with the signing of the Act of Acceptance of the Labor History. Subsequently, said document will be presented by the non-pensioned disabled affiliate as an attachment to the corresponding disability benefits application.

Interruption of the procedure Art. 15.- The affiliate may interrupt the procedure of their first report disability pension application by sending a note to the AFP, in which they manifest their desire not to continue with said procedure, provided that they do so before the affiliate accepts the resolution of the benefit. If the affiliate on a subsequent date wishes to resume this procedure, they must file a new application, understanding that the interrupted process starts again. The interruption will not be admissible when the affiliates are enjoying

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disability pension by first report.

CHAPTER IV OF THE RESOLUTION OF THE APPLICATION

Favorable resolution of the application Art. 16.- In case of favorable resolution, the AFP will issue and notify the resolution of the application in accordance with the following: a) Identification of the benefit to which the affiliate is entitled in accordance with the application presented; b) Establishment of the benefit to be granted (including the amount of Christmas pension) or amount of the balance return (total or partial); c) Payment periodicity in accordance with the characteristics of the benefit and the estimation of its duration. In this section, the AFP must place a legend clarifying that these estimates may be subject to changes due to the assumptions established at the time of making them; and d) Signature of the person that the Board of Directors of the AFP delegates for such effect.

Art. 17.- The AFP must consult the affiliate on the form of disbursement of the benefit, which will be a specification of the disbursement modality that the affiliate indicates and that the AFP must consider at the time of executing the resolution. The disbursement must be made by credit to an account

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