Technical Standards for the Granting of Survivorship Benefits in 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 35 CNBCR-11/2022 NSP-50 TECHNICAL STANDARDS FOR THE GRANTING OF SURVIVORSHIP BENEFITS IN THE PENSION SYSTEM Approval: 30/12/2022 Validity: 30/12/2022

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 Gazette No. 241, Volume No. 437, of December 21, 2022, the Integrated Pension System Law 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 will be applied by Pension Fund Administrators. II. That article 2 letter a) of the Integrated Pension System Law establishes that the System will have the characteristic that its affiliates will have the right to the granting and payment of survivorship pensions determined in said Law. III. That article 111 of the Integrated Pension System Law establishes that the persons established in said article will have the right to survivorship pension. IV. That article 113 of the Integrated Pension System Law establishes that survivorship pensions will be determined in accordance with the reference percentages established in article 112 of said Law. V. That article 114 of the Integrated Pension System Law establishes the minimum pensions for the System. VI. That article 122 of the Integrated Pension System Law establishes that the Central Reserve Bank of El Salvador, through its Committee of Norms, will be responsible for issuing the corresponding technical regulations to facilitate the application of benefits charged to the fund: old-age, disability, and survivorship pensions. VII. That article 159 of Legislative Decree No. 614, by which the Integrated Pension System Law was approved, establishes that the Central Reserve Bank of El Salvador will issue the Technical Standards and Resolutions 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 35 CNBCR-11/2022 NSP-50 TECHNICAL STANDARDS FOR THE GRANTING OF SURVIVORSHIP BENEFITS IN THE PENSION SYSTEM Approval: 30/12/2022 Validity: 30/12/2022

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 STANDARDS FOR THE GRANTING OF SURVIVORSHIP BENEFITS IN THE PENSION SYSTEM

TITLE I GENERAL PROVISIONS

UNIQUE CHAPTER 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 survivorship benefits and for the determination of the economic dependency condition of the parents of an affiliate who dies due to common illness or accident, in accordance with the Integrated Pension System Law.

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 as the deceased event, in accordance with the Integrated Pension System Law; 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 Integrated Pension System Law;

Alameda Juan Pablo II, between 15 and 17 Av. Norte, San Salvador, El Salvador. Tel. (503) 2281-8000 www.bcr.gob.sv Page 3 of 35 CNBCR-11/2022 NSP-50 TECHNICAL STANDARDS FOR THE GRANTING OF SURVIVORSHIP BENEFITS IN THE PENSION SYSTEM Approval: 30/12/2022 Validity: 30/12/2022

f) Years of contributions: 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 Reserve Bank of El Salvador; h) Beneficiaries with right to survivorship benefits: Members of the family group of the affiliate who dies from common illness or accident, understood as the spouse, the partner, the children, and the parents, the latter always provided they are economically dependent on the deceased, in accordance with article 111 of the SP Law; i) Beneficiaries: In accordance with what is established in article 111 of the Integrated Pension System Law, they are the beneficiary persons of the affiliate before their AFP of their Individual Savings Account for Pensions when the benefit to be granted is a balance refund; j) Deceased Event (Causante): Affiliate who, upon their death, generates the right to pension or balance refund by inheritance; k) CIAP: Individual Savings Account for Pensions: is the sum of the worker's mandatory contributions and the proportion corresponding to the employer's contribution and the returns credited. Additionally, any other contribution established for specific cases, provided they meet the requirements of the Integrated Pension System Law, will form part of the Individual Savings Account for Pensions; l) CGS: In accordance with article 119 of the Integrated Pension System Law, it is the mechanism that assumes the present and future financing and payment of the Minimum Pension and the obligations corresponding to the Welfare Institutes of the Public Pension System, with the object of giving sustainability to the payment of pensions, in a stable and lifelong manner; m) Health Coverage: Right to enjoy the medical benefits granted by the Regime of Maternity, Illness, and Professional Risks of the ISSS or the Special Program of Maternity and Illness of the Public Teaching Sector, or any other program that provides health coverage; n) Partner: The term partner will refer to the man or woman in a non-marital union in accordance with article 118 of the Family Code, for which it must be proven through a judicial declaration of this status; this proof will not be required in cases where there are common children, whether born or conceived, without other requirements intervening; o) CT: Transfer Certificate or its equivalent value; p) Days: When used for a term, it shall be understood that it refers to calendar days; q) Identity Document: It may be the Unique Identity Document, Minor's Card, Passport, or Resident Card, as applicable;

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 35 CNBCR-11/2022 NSP-50 TECHNICAL STANDARDS FOR THE GRANTING OF SURVIVORSHIP BENEFITS IN THE PENSION SYSTEM Approval: 30/12/2022 Validity: 30/12/2022

r) 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 Integrated Pension System Law; s) FSV: Social Housing Fund; t) ISBM: Salvadoran Institute of Teacher Welfare; u) ISSS: Salvadoran Social Security Institute; v) ISP: Salvadoran Institute of Pensions; w) SP Law: Integrated Pension System Law; x) SAP Law: Savings System for Pensions Law, repealed by Legislative Decree No. 614, of December 20, 2022, published in the Official Gazette No. 241, Volume No. 437, of December 21 of the same year; y) Parents: Father and mother of the deceased affiliate; z) 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;

aa) Current minimum wage: Current minimum wage for the Commerce and Services sector; bb) SP: Pension System; cc) SAP: Savings System for Pensions; dd) SBR: Regulator Basic Salary; ee) SPP: Public Pension System; ff) Superintendence: Superintendence of the Financial System; and gg) UAIHL: Comprehensive Unit for Labor History Attention.

TITLE II ON THE GRANTING OF SURVIVORSHIP BENEFITS IN THE PENSION SYSTEM

CHAPTER I PREVIOUS PROCEDURES TO THE GRANTING OF SURVIVORSHIP BENEFITS

Declaration of beneficiaries Art. 4.- Each affiliate must declare, before the respective AFP, the names and existence of their potential beneficiaries. In the month of June of each year, the AFP will make available to each affiliate the respective forms for the update of this information through the agencies and electronic channels that the AFPs make available to them, in addition, they must provide the necessary advice for this purpose, including financial education material regarding the topic. Repealed. (4)

In cases where a beneficiary dies after the death of the affiliate, but before the granting of the benefit, this will form part of the estate that corresponded to them, because the right had already been acquired, and it is transferred to their heirs.

Publication of list of deceased affiliates Art. 5.- The AFP must publish during the first twenty days of the months of January, March, May, July, September, and November of each year, in two printed media of national circulation or another digital publication platform with greater or equal coverage, or on its website, in accordance with the current legal framework, the list of deceased affiliates in the previous bimester, of which it has knowledge. This publication will be for the purpose of calling beneficiaries to present themselves to claim their rights. Additionally, the AFP may publish the list of deceased affiliates in the previous bimester on its website, possibly even expanding the mentioned list for those cases where no beneficiary has yet presented themselves.

Communication to beneficiaries Art. 6.- Repealed. (4)

Advice to beneficiaries Art. 7.- When beneficiaries present themselves to the AFP, the latter must provide the corresponding advice to start the respective procedure, as well as regarding the documentation to present and the process to follow to obtain any survivorship benefit.

Labor History Art. 8.- If the AFP identifies that the deceased non-pensioned affiliate might have contributions in the Public Pension System, it must provide adequate advice to the beneficiary so that they can start the corresponding procedures for the review of the Contribution History to the Public Pension System, assigning them an appointment at the UAIHL. This process will end with the signing of the Acceptance Act of the Labor History, a document that must be presented as an annex to the request to start the procedure for the corresponding survivorship benefit. Art. 9.- The beneficiary must review the consolidated Labor History of the non-pensioned affiliate provided by the AFP, to verify compliance with the time requirements to access survivorship benefits. If the beneficiary does not agree with the information recorded in the Labor History of the non-pensioned affiliate, they must request the review and the corresponding management to the AFP.

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 35 CNBCR-11/2022 NSP-50 TECHNICAL STANDARDS FOR THE GRANTING OF SURVIVORSHIP BENEFITS IN THE PENSION SYSTEM Approval: 30/12/2022 Validity: 30/12/2022

CHAPTER II ON SURVIVORSHIP BENEFITS

Survivorship benefits Art. 10.- Upon the death of an affiliate, their beneficiaries may receive a monthly pension or refund of the accumulated balance in the CIAP, in accordance with the requirements established in these Standards for such cases.

Survivorship pension Art. 11.- Survivorship pension is defined as the monetary benefit granted to beneficiaries with the right to survivorship pension of an affiliate who dies. The survivorship pension will be delivered as a monthly payment and can be temporary or lifelong, depending on the age and condition of the beneficiary with the right to survivorship pension. Members of the family group of the affiliate who dies from any common illness or accident will have the right to survivorship pension, as established in article 111 of the SP Law.

Balance refund in case of survivorship Art. 12.- When the non-pensioned affiliate does not meet the requirements mentioned in article 13 of these Standards, the accumulated balance in their CIAP will be refunded in the percentages and to the beneficiaries in accordance with what is established in article 112 of the SP Law. The refund will be carried out in accordance with what is established in article 123 of the SP Law.

Requirements that the affiliate must meet to generate a survivorship pension Art. 13.- For a non-pensioned affiliate who dies due to common accident or illness caused by common risks to generate a survivorship pension, they must meet 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 they died, in case of death by accident or common illness, or having contributed at least six months during the last twelve and the accident or illness having occurred after their affiliation; or, c) Registering a minimum of ten years of effective contributions on the date of death. For the purpose of calculating the contribution time, the AFP must sum the number of days credited in each contribution month and divide this total by 365.25. The hundredths figure will be rounded to the immediate higher figure when the thousandths figure 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 following higher figure will be used.

If the deceased event does not meet any of the above requirements, the AFP will proceed with the refund of the CIAP balance, in accordance with what is stipulated in article 12 of these Standards.

Art. 14.- In the case of beneficiaries of affiliates pensioned for old age or disability, it will not be necessary to evaluate compliance with the requirements indicated in article 13 of these standards, because the rights acquired by the deceased event are transferred.

Requirements that the beneficiary must meet to access a survivorship pension Art. 15.- To access a survivorship pension, beneficiaries must meet at least one of the following requirements: a) For the Spouse or Partner: i. Have contracted marriage with the deceased event; ii. In the case of non-marital union, they must demonstrate their status as 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 will not be required in cases where there are common children, whether born or conceived, without other requirements intervening, except when two or more people present themselves requesting pension by claiming to be the partner of the deceased affiliate, notwithstanding, the Administrator is empowered to verify if the cohabitation existed materially. 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 their age, for which they must undergo a report from the Invalidity Assessment Commission. c) For the parents: i. Be economically dependent on the deceased event, provable by the AFP through the result of a socioeconomic study carried out in accordance with Title III of these Standards. Notwithstanding the above, if the parents have a condition of invalidity before the date of death of the deceased event, the previous requirement will not be required and they must undergo the invalidity assessment process, so that the Invalidity Assessment Commission issues the corresponding report.

Alameda Juan Pablo II, between 15 and 17 Av. Norte, San Salvador, El Salvador. Tel. (503) 2281-8000 www.bcr.gob.sv Page 6 of 35 CNBCR-11/2022 NSP-50 TECHNICAL STANDARDS FOR THE GRANTING OF SURVIVORSHIP BENEFITS IN THE PENSION SYSTEM Approval: 30/12/2022 Validity: 30/12/2022

Inheritance Art. 16.- The balance of the CIAP will form part of the estate of a deceased event who dies, in the following cases: a) When on the date of their death no beneficiaries with right to survivorship pension were registered; b) When the last person with right to survivorship pension ceases to be a beneficiary; c) When an affiliate dies due to professional risks; d) When an affiliate who received a balance refund and continued contributing dies; e) When an affiliate pensioned to the SPP who made contributions to the SAP dies; f) When an affiliate who was receiving a balance refund in annuities and still has a balance in their account dies; and g) When there are no beneficiaries with right to pension and there is a balance in the CIAP of affiliates pensioned for old age. For the delivery of the balance as inheritance, the procedures considered in civil law and article 117 of the SP Law will be followed. If after ten years from the death of the affiliate or from the date when the last person with right to survivorship pension ceased to be a beneficiary, no heirs present themselves, prior notice from the Administrator, the balance of the individual savings account for pensions will pass to the person whom the affiliate designated in such eventuality by means of a form, in accordance with Annex No. 1 of these Standards, or in the absence or death of that designated person, it will pass to be transferred to the charity institution or hospitals that the affiliate has freely established in the same way, provided there is a balance in the individual savings account for pensions. In order to avoid the prescription described in the previous paragraph, in the first sixty days of each calendar year, each AFP must publish once in two printed media of national circulation or another digital publication platform with greater or equal coverage, or on its website, in accordance with the current legal framework, the names of the deceased affiliate in alphabetical order indicating the remaining time from the date of publication for the CIAP balance to prescribe. Art. 17.- In the event of the death of an affiliate who was enjoying a permanent economic benefit or a temporary economic benefit charged to their CIAP and there is a remaining balance in the same at the time of their death, the remaining balance will form part of their estate and will not generate survivorship benefits.

Alameda Juan Pablo II, between 15 and 17 Av. Norte, San Salvador, El Salvador. Tel. (503) 2281-8000 www.bcr.gob.sv Page 7 of 35 CNBCR-11/2022 NSP-50 TECHNICAL STANDARDS FOR THE GRANTING OF SURVIVORSHIP BENEFITS IN THE PENSION SYSTEM Approval: 30/12/2022 Validity: 30/12/2022

CHAPTER III ON THE REQUEST FOR SURVIVORSHIP BENEFITS

Requests Art. 18.- The requests to start the procedure for survivorship benefits made by beneficiaries must be available to them, through the agencies and electronic means that the AFPs make available to them. Any beneficiary who wishes to obtain any survivorship benefit must start the procedure with the signing of the corresponding request. In the event that the beneficiary is unable to carry out this procedure personally, they may be represented by a person authorized by the corresponding legal means. Art. 19.- The request must contain at least the following information: a) Logo and full name of the AFP; b) Name and number of the request or form that is being treated; c) Beneficiary data: i. Name; ii. Sex; iii. Kinship; iv. Family status; v. Nationality; vi. Identity Document Number (for Salvadoran people), Passport or Resident Card (for foreign people), valid and in good condition, as applicable; vii. Full address; viii. Contact phone; ix. Email; and x. Means by which they wish to receive notifications about the status of their request, including the details thereof (email, text message, directed letter). d) Deceased event data: i. Name; ii. Sex; iii. Nationality; and iv. Identity Document Number (for Salvadoran people) Passport or Resident Card (for foreign people), valid and in good condition.

Alameda Juan Pablo II, between 15 and 17 Av. Norte, San Salvador, El Salvador. Tel. (503) 2281-8000 www.bcr.gob.sv Page 8 of 35 CNBCR-11/2022 NSP-50 TECHNICAL STANDARDS FOR THE GRANTING OF SURVIVORSHIP BENEFITS IN THE PENSION SYSTEM Approval: 30/12/2022 Validity: 30/12/2022 e) Place and date of presentation of the request; f) Signature of the applicant; and g) Stamp and signature of the employee authorized by the AFP to receive the request. The AFP must have the original and a copy of the request and will deliver a copy to the beneficiary. In the event that the request is presented by physical means, these must not contain smudges, strikethroughs, or any other alteration of the same. The AFP, for the request reception process, may make electronic means available to the beneficiary; notwithstanding, such request will be formalized with the signature of the beneficiary presenting for this purpose their Identity Document, resident card, or passport in the case of foreigners. In the event of being represented...