Technical Standards for the Granting of Survivor Benefits in the Public 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 29 CNBCR-11/2022 NSP-70 TECHNICAL STANDARDS FOR THE GRANTING OF SURVIVOR BENEFITS IN THE PUBLIC 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 the Official Diary No. 241, Volume No. 437, of the 21st of the same month and year, the Comprehensive Law of the Pension System was issued.

II. That Article 2, letter m) of the Comprehensive Law of the Pension System establishes that the benefits established in said Law shall apply to affiliates of the Public Institutes.

III. That Article 111 of the Comprehensive Law of the Pension System establishes that the persons established in the referred article shall have the right to survivor pension.

IV. That Article 113 of the Comprehensive Law of the Pension System establishes that survivor pensions shall be determined in accordance with the reference percentages established in Article 112 of the referred Law.

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

VI. That Article 149 of the Comprehensive Law of the Pension System establishes that the Public System, which includes the Pension Unit of the Salvadoran Institute of Social Security (ISSS) and the Salvadoran Institute of Pensions (ISP), shall provide benefits in accordance with said Law and its own creation Laws.

VII. That Article 159 of the Comprehensive Law of the Pension System establishes that the Central Reserve Bank of El Salvador shall issue the Technical Standards necessary to allow the development of what is established in the referred Law.

VIII. That Article 7, letter l) of the Law on Supervision and Regulation of the Financial System establishes that the National Institute of Public Employees' Pensions and the Salvadoran Institute of Social Security are members of the financial system, the latter with respect to the Public Pension System, the Professional Risks Regime, and technical health reserves.

IX. That Article 101, fourth paragraph of the Law on Supervision and Regulation of the Financial System, establishes that the powers to approve, modify, and repeal technical norms that must be complied with by members of the financial system and other supervised entities, which were attributed to the Superintendencies or the Directing Councils of the Superintendencies whose organic laws were repealed by the same Law, are transferred to the Central Bank.

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 29 CNBCR-11/2022 NSP-70 TECHNICAL STANDARDS FOR THE GRANTING OF SURVIVOR BENEFITS IN THE PUBLIC PENSION SYSTEM Approval: 12/30/2022 Validity: 12/30/2022

X. That it is necessary to update the requirements and procedures for the granting of Survivor Benefits in the Public Pension System, in such a way that they can be executed in an agile and efficient manner.

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 SURVIVOR BENEFITS IN THE PUBLIC PENSION SYSTEM

CHAPTER I OBJECT, SUBJECTS, AND TERMS

Object Art. 1.- The object of these Standards is to establish the requirements and procedures that the obligated subjects of these Standards must follow to grant survivor benefits in the Public Pension System. Likewise, to establish the methodology for the calculation and distribution of said benefits.

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

Terms Art. 3.- For the purposes of these Standards, the terms indicated below have the following meaning: a) Active Affiliate: Worker enrolled in one of the Disability, Old Age, and Death Regimes, administered by the Salvadoran Institute of Pensions; or by the Salvadoran Institute of Social Security, who was contributing, in an obligatory manner, on the date of death; b) Insured: Worker enrolled in one of the Disability, Old Age, and Death Regimes, administered by the Salvadoran Institute of Pensions; or by the Salvadoran Institute of Social Security, who participated or participates in the financing of one or both Regimes, through contributions; c) AFP: Pension Fund Administrator; d) Central Bank: Central Reserve Bank of El Salvador; e) Beneficiaries: Members of the family group of the affiliate who dies from illness or common accident, understood as the spouse, the cohabiting partner, the children, and the parents, the latter always provided they are economically dependent on the affiliate or pensioner in the Public Pension System who has died; f) Deceased: Affiliate or pensioner of the Public Pension System who, upon their death, generates the right to a survivor benefit for their beneficiaries; g) Unemployment: It constitutes a period in which the affiliate does not perform an economic activity that generates the obligation to contribute to the Public Pension System; h) Disability Assessment Commission: Instance created by Article 104 of the Comprehensive Law of the Pension System that enjoys autonomy regarding the knowledge and assessment of 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. This Commission is the only one legally authorized to assess applications and issue Disability opinions in accordance with the provisions contained in the "Technical Standards for the Assessment of the Degree of Disability and Determination of Serious Illness to Rule on the Right to Disability Pension and Return of Balance for Serious Illness by the Disability Assessment Commission" (NSP-45), issued by the Central Reserve Bank through its Committee of Norms; i) Cohabiting Partner: The term cohabiting partner shall refer to the man or woman in a non-marital union in accordance with Article 118 of the Family Code, for which this status must be proven through a judicial declaration; this proof shall not be required in cases where there are common children with the cohabiting partner, whether born or conceived, without any other requirements; j) Work History: The historical record of contributions and payments that have been made to the Disability, Old Age, and Death Regime administered by the Salvadoran Institute of Pensions; or by the Salvadoran Institute of Social Security, by the employer and the employee, respectively; k) Pension Institutes: Refers to the Salvadoran Institute of Pensions and the Salvadoran Institute of Social Security; l) ISBM: Salvadoran Institute of Teacher Welfare; m) ISP: Salvadoran Institute of Pensions; n) ISSS: Salvadoran Institute of Social Security; o) SP Law: Comprehensive Law of the Pension System; p) INPEP Number: Number granted by the National Institute of Public Employees to its affiliates, prior to the entry into force of the Law Creating the Salvadoran Institute of Pensions. q) Parents: Father and mother of the deceased affiliate; r) Survivor Pension: Corresponds to the monetary benefit granted by the Disability, Old Age, and Death Regime of the ISSS or ISP, as the case may be, to the beneficiaries of an affiliate or pensioner who dies. The survivor pension will be delivered as a monthly payment and may be temporary or lifelong, depending on the age and condition of the beneficiary; s) Recalculation: The recalculation of survivor pensions consists of a modification in the pension percentage as a consequence of the incorporation of new beneficiaries or due to the loss of right by any of them. In concrete terms, the recalculation translates into a modification in the pension amount initially assigned to each of the beneficiaries; t) IVM Regime: Disability, Old Age, and Death Regime; u) SP: Pension System; v) SBR: Regulator Basic Salary; w) SPP: Public Pension System; and x) Superintendency: Superintendency of the Financial System.

CHAPTER II GENERAL ASPECTS

Scope of Application Art. 4.- It shall be the responsibility of the IVM Regime administered by the ISSS or ISP, or both, if applicable, for the survivor benefits referred to in these Standards, when generated in any of the following cases: a) In the case of death of an active affiliate, provided that the origin of death is a common illness or accident; b) In the case of death of a pensioner due to common disability or disability from professional risks; and c) By death of a pensioner due to old age, regardless of the cause or origin of death, shall also generate the right to a survivor pension in the SPP. In all cases of letters a) and b) of this article, benefits shall be granted provided that the deceased had met the contribution time requirements set forth in the SP Law and Article 8 of these Standards.

Art. 5.- The survivor benefits referred to in these Standards shall not apply in the case of active affiliates of the ISSS or ISP, when they die due to illness or accident from professional risk.

Art. 6.- The Pension Institutes shall consider the incompatibility between benefits granted by the ISSS Health Regime with those granted by the ISSS or ISP IVM Regime originating from the same risk. (1)

Art. 7.- To establish the origin of death of an active affiliate and determine the Disease, Maternity, and Professional Risks Regime or the IVM Regime that will be responsible for paying the corresponding benefits, the information contained in the Death Certificate of the affiliate, the Medical-Legal Recognition Certificate, the Forensic Report, as the case may be, will be used. If the analysis of the information results that the cause of death was a work accident or professional illness, it will correspond to the Disease, Maternity, and Professional Risks Regime of the ISSS to grant the corresponding survivor benefits.

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Alameda Juan Pablo II, between 15 and 17 Av. Norte, San Salvador, El Salvador. Tel. (503) 2281-8000 www.bcr.gob.sv Page 4 of 29 CNBCR-11/2022 NSP-70 TECHNICAL STANDARDS FOR THE GRANTING OF SURVIVOR BENEFITS IN THE PUBLIC PENSION SYSTEM Approval: 12/30/2022 Validity: 12/30/2022

Alameda Juan Pablo II, between 15 and 17 Av. Norte, San Salvador, El Salvador. Tel. (503) 2281-8000 www.bcr.gob.sv Page 5 of 29 CNBCR-11/2022 NSP-70 TECHNICAL STANDARDS FOR THE GRANTING OF SURVIVOR BENEFITS IN THE PUBLIC PENSION SYSTEM Approval: 12/30/2022 Validity: 12/30/2022

CHAPTER III OF THE REQUIREMENTS TO GENERATE SURVIVOR PENSION IN THE SPP

Requirements Art. 8.- For an active affiliate or insured to generate the right to a survivor pension, the Pension Institutes shall consider any of the following requirements: a) Three years of contributions during the five years prior to the date of death; b) Being contributing at the moment of death, in case of death by accident or common illness, or having contributed at least six months during the last twelve months and the accident or illness having occurred after their affiliation; and c) Registering a minimum of ten years of effective contributions on the date of death.

On the applicability or not of the accumulation of periods to grant survivor pension Art. 9.- When the deceased had contributed, during their working life, to both Pension Institutes and the times registered in one of them were sufficient for the granting of a survivor pension to the beneficiary family group, the accumulation of periods that the deceased registered in the other Pension Institute shall not be used. This provision will give rise to the generation of two independent benefits, which may be any of the following combinations: a) One pension in one Institute and an allowance in the other, and b) Two survivor pensions, taking into account the compatibility between them in the SPP. In both cases, the beneficiaries of the deceased must request the respective benefits independently. In the case of the allowance referred to in letter a), the work history of the deceased must register at least twelve months of continuous or discontinuous contributions.

Art. 10.- Additionally to what is established in the previous article, if there are simultaneous contributions to both Pension Institutes, they will be counted independently. When the independent times in each of the IVM Regimes of the ISSS and ISP are insufficient for an affiliate to generate survivor pensions, the periods contributed to the ISSS can be accumulated with the times contributed to the ISP and vice versa, thus completing the required contribution time requirement. In the case where there are periods in which simultaneous contributions were made to both Pension Institutes, these will be counted only once.

Art. 11.- In the case of voluntary contributors who die due to common risks, they shall have the right to Survivor Benefits in the SPP provided they meet any of the contribution time requirements established in Article 8 of these Standards, as the case may be. In case that on the date of their death, the voluntary contributor was without making contributions for up to a period of twelve months, they will generate the right to survivor pensions provided they accredited in their Work History a minimum of five years of contribution, continuous or discontinuous, from their affiliation to the ISSS or ISP. In case of death due to professional risk of an affiliate, voluntary contributor, the IVM Regime administered by the ISSS or ISP, as the case may be, shall have no responsibility for the payment of benefits to the survivors. In any case, it will be the Disease, Maternity, and Professional Risks Regime of the ISSS that will grant the benefit to which they are entitled provided the deceased had accredited the requirements established by said regime.

CHAPTER IV OF THE BENEFICIARIES AND THE REQUIREMENTS THEY MUST MEET TO ACQUIRE THE RIGHT TO SURVIVOR PENSION

Beneficiaries Art. 12.- In accordance with Article 111 of the SP Law, the following shall have the right to survivor pension: a) The children of the affiliate up to the age of 18 years; or up to 24 years if they are studying basic, secondary, technical, or higher education; or of any age if they have any disability as ruled by the Disability Assessment Commission; b) The widow or widower; the cohabiting partner in a non-marital union declared judicially in accordance with what is provided in the Family Code. Such declaration shall not be required if there are common children with the cohabiting partner, born or conceived, except when two or more persons apply for pension claiming to be the cohabiting partner of the deceased affiliate; however, the Pension Institutes are authorized to verify if there was material cohabitation; and

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c) The parents of the deceased, if they were economically dependent on the affiliate; notwithstanding the above, if the parents have a disability condition before the date of death of the deceased, this requirement shall not be required.

Requirements that survivor pension beneficiaries must meet Art. 13.- To access the survivor pension, beneficiaries must comply with the following: a) For the Spouse or Cohabiting Partner: i. Have married the deceased; ii. In the case of non-marital union, they must demonstrate their status as cohabiting partner in accordance with Article 118 of the Family Code, for which they must follow a trial in the corresponding instances, who will certify the cohabitation. This shall not be required in cases where there are common children, whether born or conceived, without any other requirements, except when two or more persons apply for pension claiming to be the cohabiting partner of the deceased affiliate, notwithstanding, the Institute is authorized to verify if there was material cohabitation. b) For the children: i. Be under 18 years of age; ii. Be a student of basic, secondary, technical, or higher education if their age is between 18 and 24 years. iii. Be an invalid child, regardless of age, for which they must undergo an opinion from the Disability Assessment Commission. c) For the parents: i. Be an economic dependent of the deceased, provable by the Pension Institutes through the result of a socioeconomic study. Notwithstanding the above, if the parents have a disability condition before the date of death of the deceased, the previous requirement shall not be required and they must undergo the disability assessment process, so that the Disability Assessment Commission issues the corresponding opinion.

Probative documentation to access the right to a survivor benefit Art. 14.- The person(s) responsible for the management of survivor benefits must present the corresponding documentation for the identification, affiliation, and death of the deceased, as follows: a) ISSS or ISP affiliation card, or both, if applicable; b) Unique Identity Document; c) Certification of the Death Certificate; d) In case of accidental death, the Medical-Legal Recognition Certificate issued by the competent authority will be required; and in cases of presumption of death by disappearance, what is established in the Civil Code and the Civil and Commercial Procedural Code will apply; e) Forensic Report, if applicable; f) Certification of the birth certificate, which must be issued no more than six months prior; and (3) g) When it concerns the death of a pensioner of the Health Regime, a copy of the documentation stating their status as a pensioner for Professional Risks of the ISSS must also be presented.

CHAPTER V OF THE APPLICATION FOR SURVIVOR BENEFITS Art. 15.- When the beneficiary or beneficiaries, or their legal representative, present themselves to initiate the benefit processing procedure for survivor pension, the Pension Institute will verify in the Work History System the compliance with the contribution time requirements of the deceased, in accordance with Article 8 of these Standards. After verifying the compliance with the contribution time requirements of the deceased, the Pension Institute will inform the beneficiaries according to each case about the following: a) That the deceased indeed accumulated the required contribution time, thereby generating the right to a survivor pension; b) That the deceased did not meet the required contribution times, but registered at least twelve months of contributions, so the granting of a Survivor Allowance is appropriate, whose calculation method is the same indicated for the case of old age allowance; or c) That the affiliate did not register the necessary contribution times to obtain a survivor pension or allowance, so no benefit shall be granted. If the beneficiary, or their representative, disagrees with the contribution time registered for the deceased, they must present their claim to the Pension Institute, attaching the probative documents of said times and contributed salaries. If the deceased had accumulated the necessary time to generate a survivor benefit, it shall not be an impediment to calculate the respective benefit that there are declared but unpaid contributions or contributions in arrears. In any case, it shall be the option of the interested party, or their representative, whether the definitive calculation of the pension is carried out omitting said contributions in arrears or if said calculation remains suspended until the date when the contributions and contributions that should have been made in favor of the deceased are recovered. The recovery of said contributions and contributions will be managed by the Pension Institute upon request of the interested party (or parties).

In cases where the periods with problems serve to complete the times required to obtain the right to pension, this situation must be informed to the interested party (or parties), in order to give them the option between a survivor allowance or initiating the management to collect the arrears. If they opt for the latter, the pension calculation will be suspended, restarting on the date when said contributions have been recovered. If after the administrative or judicial collection actions have not resulted in the recovery of the arrears, the possibility of granting a Survivor Allowance must be determined. Notwithstanding the above, contributions in arrears attributable to the employer may be paid directly by the beneficiary (or beneficiaries), provided that it is demonstrated that there was re

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