Technical Standards for the Use of Reference Share Value for Outgoing Cash Flows from Pension Funds — SSF — SV

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 Integral Law of the Pension System was issued, thereby creating the Pension System for workers in the private, public, and municipal sectors.
II. That Article 2 of the Integral 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 pensions determined in the aforementioned Law, that individual savings accounts for pensions will be administered by Pension Fund Administrators, and that affiliates will have freedom to choose and transfer between Administrators.
III. That Article 4 of the Integral Law of the Pension System establishes that the Central Reserve Bank of El Salvador, through its Committee of Standards, will be responsible for issuing the corresponding technical regulations to facilitate the application of said Law.
IV. 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 and Resolutions necessary to allow the development of what is established in this 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 USE OF REFERENCE SHARE VALUE FOR OUTGOING CASH FLOWS FROM PENSION FUNDS

CHAPTER I
OBJECT, SUBJECTS, AND TERMS

Object
Art. 1.- These Standards aim to establish the procedure to homogenize the recording of flows generated by obligations of the Pension Funds with affiliates or their beneficiaries.

Subjects
Art. 2.- The subjects obligated 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) AFP or Administrator: Pension Fund Administrators; b) Central Bank: Central Reserve Bank of El Salvador; c) CIAP: Individual Savings Account for Pensions; d) Outgoing cash flows: Those arising from inconsistencies due to unidentified contributions, as well as the closure of the CIAP in the Administrator due to transfers between AFPs, contract cancellations, return of balances, payment of excess freely available funds, annual return of CIAP balances to pensioned affiliates, as well as payment by inheritance; e) SP Law: Integral Law of the Pension System; f) Superintendence: Superintendence of the Financial System; and g) Share Value: Value in United States dollars of the share of a Pension Fund.

CHAPTER II
PROCEDURE TO HOMOGENIZE THE RECORDING OF FLOWS GENERATED BY OBLIGATIONS OF PENSION FUNDS TO AFFILIATES OR BENEFICIARIES

Art. 4.- The AFPs must apply, in the case of outgoing cash flows from the pension fund they administer, the following procedure:
a) At the time of making the outgoing cash flows, the AFP must establish as the reference share value, the current share value, seven days before the transaction; or b) In the case of a new pension fund, where the share value of the day is not available at the time the cash flow occurs, the AFP to establish the reference share value of letter a) of this article, must proceed as follows:
i. At the time of carrying out the transaction, the movement must be registered in the mechanized system, as well as in the auxiliary records of the AFP;
ii. The accounting recording of the outgoing cash flows must be made with the current share value on the day of the transaction, and its recording cannot exceed

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CNBCR-11/2022
NSP-63
TECHNICAL STANDARDS FOR THE USE OF REFERENCE SHARE VALUE FOR OUTGOING CASH FLOWS FROM PENSION FUNDS Approval: 12/30/2022 Validity: 12/30/2022 seven calendar days subsequent to the date on which the outgoing flows occurred;
iii. The profitability differential generated in the outgoing cash flows due to the variation of the share value corresponding to the day of the transaction and the reference share value used, must be settled against account 331.01
iv. This provision applies to the accounting recording in the pension fund's accounting and in the AFP's accounting, in those accounts that serve as a link between both.

CHAPTER III
OTHER PROVISIONS AND VALIDITY

Sanctions
Art. 5.- 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. 6.- Technical Standards for the Use of Reference Share Value for Outgoing Cash Flows from Pension Funds (NSP-28), approved by the Committee of Standards of the Central Reserve Bank of El Salvador, in Session No. CN-10/2019, of May 29, 2019.

Unforeseen Aspects
Art. 7.- Aspects not provided for in regulatory matters in these Standards will be resolved by the Central Bank through its Committee of Standards.

Validity
Art. 8.- These Standards will enter into force as of the thirtieth of December of the year two thousand twenty-two.

Lineage: No known changes