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2022-12-30 | NSP-43

Added 2026-07-11 · Updated 2026-07-25

Technical Standards for the Granting of Old-Age Benefits in the Pension System

The Central Reserve Bank of El Salvador issued these standards to establish procedures for Pension Fund Administrators regarding the granting of old-age benefits under the Integral Law of the Pension System. The document mandates that administrators identify affiliates nearing retirement age, process applications for benefits such as the old-age pension, temporary and permanent economic benefits, and balance returns, and calculate payments based on Individual Pension Savings Account balances. It specifies contribution time thresholds, including a minimum of twenty-five years for the old-age pension, and sets deadlines for application reviews and appeal resolutions.

El Salvador

Superintendencia del Sistema Financiero

CNBCR-11/2022 NSP-43 TECHNICAL STANDARDS FOR THE GRANTING OF OLD-AGE BENEFITS IN THE PENSION SYSTEM Approval: 12/30/2022 Validity: 12/30/2022 Alameda Juan Pablo II, between 15 and 17 North Ave, San Salvador, El Salvador. Tel. (503) 2281-8000 www.bcr.gob.sv Page 1 of 33

THE COMMITTEE OF STANDARDS 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 Law of the Pension System was approved. II. That article 2, letter l) of the Integral Law of the Pension System establishes that the Pension System will have a Solidarity Guarantee Account, which will finance benefits in accordance with the provisions of the Law and will be part of the Pension Fund. III. That article 96 of the Integral Law of the Pension System establishes the ages for an affiliate to access an old-age pension. IV. That article 119 of the Integral Law of the Pension System establishes that the Solidarity Guarantee Account will be constituted as a mechanism that assumes the present and future financing and payment of the minimum pension and the obligations detailed in the aforementioned article. V. That article 124 of the Integral Law of the Pension System establishes that the affiliate who reaches the legal age to retire for old age and registers less than ten years of continuous or discontinuous monthly contributions will have the right to the return of the balance of their individual account in a single amount. VI. That article 125 of the Integral Law of the Pension System establishes that affiliates who reach the legal age to access old-age benefits and register contribution times ranging from a minimum of ten years to a maximum of twenty years, may access to enjoy a Temporary Economic Benefit and a return of contributions made to the Solidarity Guarantee Account. VII. That article 126 of the Integral Law of the Pension System establishes that affiliates who reach the legal age to retire for old age and do not meet the contribution time requirements established in article 96 of the aforementioned Law and who have contributed for more than twenty years, continuous or discontinuous, will have the right to choose between receiving a Permanent Economic Benefit or the return of the individual account balance in a single amount. VIII. That article 159 of the Integral Law of the Pension System establishes that the Central Reserve Bank of El Salvador will issue the Technical Standards necessary to allow the development of what is established in the aforementioned 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 THE GRANTING OF OLD-AGE BENEFITS IN THE PENSION SYSTEM

TITLE I SINGLE CHAPTER OBJECT, SUBJECTS AND TERMS

Object Art. 1.- These Standards aim to establish the procedures to be carried out by Pension Fund Administrators regarding the granting of old-age benefits established in the Integral 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) AFP: Pension Fund Administrator; c) Contribution Years: Time accumulated by contributions made, both in the Public Pension System, the Pension Savings System, and the Pension System; d) Central Bank: Central Reserve Bank of El Salvador; e) Beneficiaries: Members of the family group or designated by the affiliate who meet the requirements established in the Integral Law of the Pension System, to have the right to survivor's pension or balance return, as applicable; f) Permanent Economic Benefit (BEP): Is the payment of monthly installments from the Individual Pension Savings Account for affiliates who register contribution time in the range of more than twenty years and less than twenty-five years, whether continuous or discontinuous, in accordance with what is regulated by the Integral Law of the Pension System;

g) Temporary Economic Benefit (BET): Is the payment of monthly installments from the Individual Pension Savings Account and a return of contributions made to the Solidarity Guarantee Account if it registers contribution times ranging from a minimum of ten years to a maximum of twenty years, in accordance with what is regulated by the Integral Law of the Pension System; h) CIAP: Individual Pension Savings Account; is the sum of the worker's mandatory contributions and the proportion corresponding to the employer's contribution and the earnings credited. In addition, any other contribution for specific cases established in the Integral Law of the Pension System will form part of the Individual Pension Savings Account; i) CGS: Solidarity Guarantee Account; j) CT: Transfer Certificate or equivalent value; k) CTC: Equivalent value of the Complementary Transfer Certificate; l) Balance Return: Is the payment of the total balance of the CIAP and portion of contributions made to the CGS; m) Days: When used for a term, it shall be understood that it refers to calendar days; n) Identity Document: May be the Unique Identity Document, Minor's Card, Passport, or Resident Card, as applicable; o) DUI: Unique Identity Document; p) Legal Age or Retirement Age: Age reached that enables an affiliate to opt for an old-age benefit, in accordance with what is established in articles 96, 97, 124, 125, and 126 of the Integral Law of the Pension System; q) FSV: Social Housing Fund; r) IBC: Contribution Base Income; s) INPEP: National Institute of Pensions for Public Employees prior to the entry into force of the Law creating the Salvadoran Institute of Pensions; t) ISBM: Salvadoran Institute of Teacher Welfare; u) ISSS: Salvadoran Social Security Institute; v) ISBM Law: Law of the Salvadoran Institute of Teacher Welfare; w) SAP Law: Law of the Pension Savings System, repealed 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; x) SP Law: Integral Law of the Pension System; y) INPEP Affiliation Number: Number granted by the National Institute of Pensions for Public Employees to its affiliates, prior to the entry into force of the Law creating the Salvadoran Institute of Pensions; z) ONEC: National Office of Statistics and Censuses; aa) Old-age pension: Is the payment of two hundred and forty monthly installments and twenty Christmas pensions from the affiliate's CIAP, considering an implicit interest rate at the time of processing the benefit to which an affiliate is entitled, if they register a minimum of twenty-five years of contribution, continuous or discontinuous;

bb) Repealed. (1) cc) SAP: Pension Savings System; dd) SP: Pension System; and ee) Superintendence: Superintendence of the Financial System.

TITLE II CHAPTER I PROCEDURE PRIOR TO THE GRANTING OF OLD-AGE BENEFITS

Art. 4.- The AFP must identify affiliates who are close to reaching the legal age to access an old-age benefit, for which it must carry out the following procedure monthly: a) Inform affiliates six months before reaching the legal age, as follows: i. That they are close to reaching the legal age to access an old-age benefit, and therefore, could opt for that benefit upon reaching the legal age, at the AFP in which they are affiliated; ii. That to initiate the old-age benefit process, they must submit an application; and iii. That if the affiliate continues in a subordinate labor relationship, they must continue contributing in the percentages established in the SP Law while that relationship lasts, and the contributions to the CIAP along with the accrued profitability will be returned annually in the month of their anniversary of access to the old-age benefit. (1) b) Inform affiliates that if they defer the enjoyment of their old-age pension for a period greater than five years and the balance of their individual account exceeds the minimum balance, the remainder may: i. Be withdrawn by the affiliate, totally or partially, at the time they decide; and ii. In case the affiliate does not withdraw it, it can be used as a complement to their pension.

Pensioners for disability close to reaching legal age (1) Art. 5.- The AFP must identify monthly, through actions carried out with the corresponding entities, pensioners for occupational risk and pensioners for common disability, who are close to reaching the age to retire for old age in accordance with what is established in article 96 of the SP Law. (1) In the case of pensioners for common disability in the second ruling, they must be informed that they will be considered as pensioners for old age once the legal age is reached and their new pension will be calculated in accordance with what is established in article 97 or 152 of the SP Law, as applicable.

Likewise, the 30% increase referred to in article 98 of the SP Law will apply to the cases described in this article. Under no circumstances will the old-age pension be lower than the disability pension they were previously earning. (1) Notwithstanding the above, for cases of affiliates pensioned for disability who reach the legal age to access an old-age pension and have pending to reintegrate an Advance of Balance that they have used, the 30% increase established by the Integral Law of the Pension System in its article 98, will be adjusted according to the pending reintegration percentage, on the date on which the conversion of the disability pension to old age must be carried out. (2)

Voluntary Contributions Art. 6.- When an affiliate accesses an old-age benefit and has made voluntary contributions to their CIAP prior to the entry into force of the SP Law, they may opt to dispose of said contributions in the following manner: a) As a complement to their pension using the formula established in this article; b) Return of the amount of voluntary contributions with their respective profitability; or c) Transfer them to a Voluntary Previsional Savings Fund. The above options are mutually exclusive, so the affiliate can only opt for one of them. The AFP must advise the affiliate on the conditions of the options indicated in this article so that the affiliate decides how to dispose of their voluntary contributions. In cases where the affiliate opts to use the accumulated amount in voluntary contributions as a complement to the old-age pension benefit, the AFP must proceed with the calculation of the complement as follows: Complement = MCV / 240 [Eq. 1] Where: MCV: Amount accumulated in voluntary contributions. In the last pension complement, the payment of the residue generated by the profitability received from voluntary contributions in the CIAP will correspond.

Art. 7.- Completed and verified the information required in the previous article, the AFP must proceed with the processing and calculation of the corresponding pension based on the balance available in the affiliate's CIAP, that is, in accordance with what is established in article 97 of the SP Law, as applicable and that the affiliate accepts to receive.

CHAPTER II OF THE APPLICATION FOR OLD-AGE BENEFITS

Applications Art. 8.- Applications for the processing of old-age benefits must be available to affiliates in the offices of the AFPs or through the electronic means they define for such purposes.

Benefits Art. 9.- The old-age benefits to which the affiliate may opt once the legal age is reached, depending on the number of years contributed and required to access them, are the following: (1) a) Balance Return; b) Temporary Economic Benefit; c) Permanent Economic Benefit; and d) Old-age Pension.

Of the presentation of the application Art. 10.- Any affiliate who wishes to access any of the old-age benefits must initiate the process with the signing of the corresponding application. Art. 11.- The application must contain at minimum the following information: 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 applicable; d) Affiliate data: i. Name of the affiliate; ii. Sex of the affiliate; iii. Affiliation number with ISSS or INPEP, or both as applicable; iv. Marital status; v. Nationality; vi. Identification document used (DUI, passport, resident card) indicating the document number, place and date of issuance; and vii. Full address. e) Affiliate situation: i. Labor relationship (dependent or independent contributor, unemployed); ii. Pensioner (for occupational risks, for partial or permanent disability) or subsidized for health by ISSS. f) Beneficiary data:

i. Name of each of the beneficiaries; ii. Relationship to the affiliate; iii. Sex; and iv. Date of birth. g) Data of the financial entity where the affiliate wishes to receive the benefit payment; (4) h) Place and date of presentation of the application; i) Signature of the applicant; and j) Stamp and signature of the employee authorized by the AFP to receive the application.

Annexes of the application Art. 12.- The application must be accompanied by the following annexes: a) 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 purposes of confirming the same, which must be issued no more than six months prior; and (1) (7) b) Copy of the following documents: identity document (DUI for nationals and passport or residence card for foreigners); and affiliation document with ISSS or INPEP, or both if they have them. The AFP, for the application reception process, may make electronic means available to the affiliate; however, said application will be formalized with the signature of the affiliate presenting their identity document, resident card, or passport for the case of foreigners. In case of appearing through an attorney, they must present their identity document or another valid identity document and a power of attorney with a special clause to process the application.

Of the review of the application Art. 13.- The AFP will verify the content of the application and compliance with the requirements to opt for the benefit or will establish to the affiliate which of the benefits listed in article 9 of these Standards they can opt for, considering the years contributed. (1) If the application does not comply with what is established in articles 11 and 12 of these Standards and the requirements established by the SP Law to access an old-age benefit, the AFP will reject said application, having to explain to the affiliate the cause of the rejection within the maximum term of five business days following the date on which it was rejected. The AFP must have the original and a copy of the application and will deliver a copy to the affiliate. In case the application is presented by physical means, it must not contain erasures, strikethroughs, or any other alteration of the same.

Interruption of the process Art. 14.- The affiliate may interrupt the processing of their old-age benefit application by sending a note to the AFP, in which they manifest their desire not to continue with said process, provided that they do so before the acceptance of the benefit resolution. If the affiliate wishes to resume this process on a later date, they must file a new application, understanding that the interrupted process starts again. If during the process the AFP requires the presence of the affiliate to continue the process, they must summon them and if they do not appear within a term of ninety days, the file will be closed. If the affiliate does not appear within a term of ninety days after being notified of the issuance of the old-age benefit resolution, it will be understood that the affiliate does not wish to continue with the process and the AFP must proceed to close the file. For the application of the two preceding paragraphs, the AFPs must document the notifications made to the affiliate.

Work History Art. 15.- The affiliate must review their Work History provided by the AFP, to verify compliance with the time requirements to retire or access old-age benefits. If the affiliate does not agree with the information registered in their Work History, they must request the review and corresponding actions to the AFP.

Processing of fund transfers to the CIAP Art. 16.- If the affiliate meets the requirements to retire or to access any old-age benefit, the AFP will manage the amounts equivalent to the CT and the fund accumulated in the FSV, for cases where applicable. Such funds will be credited to the affiliate's CIAP prior to carrying out the benefit calculations, except when it concerns the old-age pension benefit, in which the CT will be paid until the CIAP balance is exhausted, paying this in monthly installments for the amount of the resulting pension, when applicable. (6)

Contributions of pensioners for health coverage Art. 17.- In the cases of granting old-age pension, affiliates and their family group will have the right to health coverage from the ISSS or the ISBM, the latter in the cases of pensioners from the public teaching sector who opt for said Institute. The contributions for coverage will be borne by the pensioner or the beneficiaries corresponding as established in the SP Law or the ISBM Law and the rate to apply will be seven point eight percent of the amount of their monthly pension, up to the limit established by said Institutes.

Affiliates from the public teaching sector who are processing an old-age pension, for the enjoyment of medical and hospital care will have the option to choose, between the ISSS and the ISBM. If choosing the latter, it must be established in the form described in Annex No. 1 of these Standards, which can be provided by the corresponding AFP and completed physically or electronically to be included and declared in the last payroll corresponding and the AFPs deduct the respective contribution rate. The above will also apply to public sector teaching workers already pensioned who so wish, being able to renounce enjoying coverage in the ISSS and request that health coverage be provided by the ISBM, by filling out the aforementioned form, which will be provided by the ISBM, for which said Institute, the last week of each month, will notify the AFPs so that they carry out the deductions of the corresponding contribution rate in the following month and also communicate to the ISSS the list of pensioners who have opted for health coverage from the ISBM. Likewise, affiliates who receive a balance return for old age may voluntarily contribute to the ISSS health program, for which they will contribute the rate indicated in the first paragraph of this article, calculated on the basis of the current minimum old-age pension. While the granting of any of the benefits indicated in this article is in process, the AFP must issue a certificate or similar document so that the affiliate processes a provisional card to use the health benefits granted by the corresponding Institute. The declaration of the AFPs' withholdings must be made within ten business days following the month in which they were withheld.

Operation Codes Art. 18.- The payment of contributions for health coverage to the Salvadoran Institute of Teacher Welfare will be identified in the Individual Pension Savings Account Statements, with the movement code described in Annex No. 2 of these Standards.

CHAPTER III PROCEDURE FOR CALCULATING OLD-AGE PENSION

Components of the CIAP Art. 19.- Once the application is received and the AFP has verified that the affiliate meets the legal age and registers a minimum of twenty-five years of contribution, continuous or discontinuous, the AFP must determine the amount of the CIAP with its components that it will use for

the calculation of the old-age pension, considering the implicit interest rate at the time of processing the benefit. The CIAP will be composed of: a) Mandatory contributions made by the affiliate and the employer; b) Earnings accrued on the contributions; c) Voluntary contributions, if any; d) Transfers from other pension systems or funds, if applicable; and e) Any other amounts established by law.

The calculation of the old-age pension will be based on the total balance of the CIAP, applying the actuarial factors established by the Superintendence of the Financial System, taking into account the life expectancy of the affiliate and the implicit interest rate.

The old-age pension will be paid in monthly installments for a period of two hundred and forty months, plus twenty Christmas pensions, as established in the Integral Law of the Pension System.

In case the affiliate opts for the Permanent Economic Benefit or the Temporary Economic Benefit, the calculation will be carried out in accordance with the specific provisions of articles 125 and 126 of the Integral Law of the Pension System, considering the balance of the CIAP and the contributions to the Solidarity Guarantee Account.

For the case of Balance Return, the AFP will pay the total balance of the CIAP and the portion of contributions made to the Solidarity Guarantee Account, in a single amount, as established in article 124 of the Integral Law of the Pension System.

The AFP must inform the affiliate of the amount of the benefit they will receive, the calculation method used, and the payment schedule, prior to the approval of the benefit.

The affiliate may appeal the calculation of the benefit within ten business days following the notification of the resolution, providing evidence of errors in the calculation or missing contributions.

The AFP must resolve the appeal within fifteen business days following its receipt.

If the appeal is upheld, the AFP must adjust the benefit amount and notify the affiliate of the new calculation.

If the appeal is rejected, the AFP must provide a detailed explanation of the reasons for the rejection.

The affiliate may file a complaint with the Superintendence of the Financial System if they are not satisfied with the resolution of the appeal.

The Superintendence will review the complaint and may order the AFP to correct the calculation or provide additional information.

The AFP must comply with the orders of the Superintendence within the established term.

Failure to comply with the provisions of these Standards may result in sanctions imposed by the Superintendence of the Financial System, in accordance with the applicable regulations.

The AFP must keep records of all applications, calculations, and communications with affiliates for a period of ten years following the closure of the file.

These records must be available for inspection by the Superintendence of the Financial System upon request.

The AFP must implement internal controls to ensure compliance with these Standards.

The AFP must train its staff on the procedures established in these Standards.

The AFP must report any changes in its procedures to the Superintendence of the Financial System within thirty days.

These Standards enter into force on the date of their approval.

The Superintendence of the Financial System is responsible for the interpretation and application of these Standards.

Any doubt regarding the interpretation of these Standards must be resolved by the Superintendence of the Financial System.

The Superintendence may issue complementary regulations to facilitate the application of these Standards.

These Standards do not modify the provisions of the Integral Law of the Pension System.

In case of conflict between these Standards and the Integral Law of the Pension System, the latter will prevail.

These Standards are published in the Official Journal.

Done in San Salvador, El Salvador, on December 30, 2022.

The Committee of Standards Central Reserve Bank of El Salvador

ANNEX NO. 1 FORM FOR CHOICE OF HEALTH COVERAGE

Affiliate Name: Affiliation Number: Date of Birth:

I, the undersigned, affiliate number ____________, hereby choose my health coverage for the old-age pension from:

[ ] ISSS (Salvadoran Social Security Institute) [ ] ISBM (Salvadoran Institute of Teacher Welfare)

Signature: Date:

AFP Stamp: Employee Signature:

ANNEX NO. 2 OPERATION CODE FOR HEALTH COVERAGE CONTRIBUTIONS

Code: 001 Description: Contribution to ISBM for Health Coverage Amount: 7.8% of monthly pension Frequency: Monthly

Note: This code must be used in the Individual Pension Savings Account Statements to identify payments made to the Salvadoran Institute of Teacher Welfare for health coverage.

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