Technical Standards on Financing Components of Benefits, Regulatory Basic Salary and Years of Contribution

NSP-48
TECHNICAL STANDARDS ON FINANCING COMPONENTS OF BENEFITS, REGULATORY BASIC SALARY AND YEARS OF CONTRIBUTION Approval: 12/30/2022 Validity: 12/30/2022

THE COMMITTEE OF NORMS OF THE CENTRAL BANK OF RESERVE 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 on December 21, 2022, the Comprehensive Law of the Pension System was approved.

II. That Article 94 of the Comprehensive Law of the Pension System establishes that old-age, disability, and survivorship pensions shall be charged to the individual savings account for pensions, and upon exhaustion of said account, they shall be financed with the Solidarity Guarantee Account.

III. That Article 95 of the Comprehensive Law of the Pension System establishes that the Regulatory Basic Salary of each affiliate shall be estimated as the monthly average of the contribution base income of the last one hundred twenty months contributed, updated with the variation of the consumer price index, prior to the declaration of disability or death.

IV. That Article 147 of the Comprehensive Law of the Pension System establishes that, for opted-in and mandatory affiliates to the Pension Savings System according to what is established in articles 184 and 185 of the Pension Savings System Law promulgated by Legislative Decree No. 927 dated December 20, 1996, published in the Official Diary No. 243, Volume No. 333 of December 23, 1996, which was repealed by the Comprehensive Law of the Pension System, they will continue to maintain their right to the transfer certificate.

V. That Article 147 of the Comprehensive Law of the Pension System, in its second paragraph, establishes that in the cases of affiliates opted into the Pension Savings System who register a minimum contribution time of ten years, the transfer certificate shall be paid in three installments payable annually from the date of enjoyment thereof, with unpaid balances accruing interest at a rate equivalent to the variation of the consumer price index. Affiliates who register contribution times of less than ten years will receive the total amount in a single payment.

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 Social Security Institute and the Salvadoran Pension Institute, shall provide benefits in accordance with the aforementioned Law and its own creation laws, and that benefits granted before the validity of the Comprehensive Law of the Pension System shall be paid in accordance with the law under which they were granted; this paragraph shall apply to benefits granted under the Pension Savings System Law promulgated by Legislative Decree No. 927 dated December 20, 1996, published in the Official Diary No. 243, Volume No. 333 of December 23, 1996, and its respective modifications.

VII. That Article 150 of the Comprehensive Law of the Pension System establishes that the balance of the individual account of each worker who contributed to the Social Fund for Housing will continue to be administered by the Social Fund for Housing and will be transferred to the individual savings account of the affiliates, upon the occurrence of the event that generates the right to a benefit contemplated in the same Law.

VIII. That Article 159 of the Comprehensive Law of the Pension System establishes that the Central Bank of Reserve of El Salvador will issue the Technical Norms 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 ON FINANCING COMPONENTS OF BENEFITS, REGULATORY BASIC SALARY AND YEARS OF CONTRIBUTION

TITLE I
GENERAL PROVISIONS

SINGLE 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 calculation and determination of the components that will finance benefits for old age, common disability, survivorship, and others established by the SP Law, components such as the Transfer Certificate and Complementary Transfer Certificate, the balance accumulated in the Social Fund for Housing, as well as what corresponds to the calculation of the Regulatory Basic Salary and the computation of years of contribution to determine the benefit to which the affiliate or beneficiary may be entitled.

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

NSP-48
TECHNICAL STANDARDS ON FINANCING COMPONENTS OF BENEFITS, REGULATORY BASIC SALARY AND YEARS OF CONTRIBUTION Approval: 12/30/2022 Validity: 12/30/2022

b) Pension Institutes that belong to the Public Pension System, with respect to Titles I, II, IV, V and VI of these Standards; and c) Social Fund for Housing, with respect to Titles I, III and VI of these Standards.

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 subscription of an affiliation contract; b) AFP: Pension Fund Administrator; c) Central Bank: Central Bank of Reserve of El Salvador; d) Beneficiaries: Members of the family group of the affiliate who dies from common illness or accident, understood as the spouse, the cohabitant, the children, and the parents, the latter always provided they are economically dependent on the deceased, or those designated by them according to the second paragraph of Article 111 of the SP Law; e) Deceased: Affiliate who upon death generates the right to a pension or, return of balance for survivorship, disability or inheritance; f) CCI: Disability Assessment Commission; g) 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 that are credited. In addition, the Transfer Certificate, Complementary Transfer Certificate, and the balance accumulated in the Social Fund for Housing, when applicable, will form part of the Individual Savings Account for Pensions; h) CGS: Solidarity Guarantee Account; in accordance with Article 119 of the Comprehensive Law of the Pension System, as a mechanism that assumes the financing and payment of the present and future 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; i) CT: Transfer Certificate or its equivalent value; j) CTC: Equivalent value of the Complementary Transfer Certificate; k) Decree 1217: Special Decree on Equalization of Pensions for Opted-in Affiliates, Included in Article 184 of the Pension Savings System Law; l) Days: When used for a term, it shall be understood that it refers to calendar days; m) Disability Report: Expert report containing the agreements of the Disability Assessment Commission constituted in session, regarding a request for disability evaluation:
i. First Report: Agreement of the Disability Assessment Commission that determines the impairment in functional capacity presented by an affiliate or beneficiary to perform remunerated work;
ii. Second Report: Agreement of the Disability Assessment Commission that ratifies or modifies the impairment determined in the first report; and
iii. Another report: Agreement of the Disability Assessment Commission upon a new request for evaluation due to worsening or improvement of disability, after a second report of partial or total disability has been issued.
n) Executed Report: Report issued by the Disability Assessment Commission 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 Disability Assessment Commission; o) Identity Document: It may be the Unique Identity Document, Minor's Card, Passport or Resident's Card, as applicable; p) DUI: Unique Identity Document; q) Legal Age: Completed age that enables an affiliate to opt for an old-age benefit, according to what is established in Article 96 of the Pension System Law; r) Granting Date: Date on which the first payment of the defined benefit is made; s) FSV: Social Fund for Housing; t) HL: Individual work history of the affiliate; u) IBC: Contribution Base Income; v) INPEP: National Institute of Pensions of Public Employees, which was dissolved by Legislative Decree No. 615, dated December 20, 2022, published in the Official Diary No. 241, Volume No. 437 of December 21, 2022; w) Pension Institution: Salvadoran Social Security Institute, Salvadoran Pension Institute or Pension Fund Administrator; x) Pension Institutes: Salvadoran Social Security Institute and Salvadoran Pension Institute; y) IPC: Consumer Price Index; z) ISP: Salvadoran Pension Institute; aa) ISSS: Salvadoran Social Security Institute; bb) IVM: Disability, Old Age and Death; cc) SAP Law: Pension Savings System Law, repealed by Legislative Decree No. 614, dated December 20, 2022, published in the Official Diary No. 241, Volume No. 437 of December 21, 2022; dd) SP Law: Comprehensive Law of the Pension System; ee) ONEC: National Office of Statistics and Censuses; ff) SAP: Pension Savings System according to what is established in the Pension Savings System Law repealed by Legislative Decree No. 614, dated December 20, 2022, published in the Official Diary No. 241, Volume No. 437 of December 21, 2022; gg) SBR: Regulatory Basic Salary;

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TECHNICAL STANDARDS ON FINANCING COMPONENTS OF BENEFITS, REGULATORY BASIC SALARY AND YEARS OF CONTRIBUTION Approval: 12/30/2022 Validity: 12/30/2022

hh) SPB: Average Base Salary; ii) SPP: Public Pension System; jj) Superintendence: Superintendence of the Financial System; and kk) UAIHL: Comprehensive Attention Unit of the Work History.

TITLE II
ON THE RECOGNITION AND PAYMENT OF THE TRANSFER CERTIFICATE AND COMPLEMENTARY TRANSFER CERTIFICATE

SUBTITLE I
ON THE TRANSFER CERTIFICATE

CHAPTER I
ON THE RIGHT TO THE TRANSFER CERTIFICATE
Art. 4.- According to what is established in Article 147 of the SP Law which provides that opted-in and mandatory affiliates to the Pension Savings System according to what is established in articles 184 and 185 of the Pension Savings System Law promulgated by Legislative Decree No. 927 dated December 20, 1996, published in the Official Diary No. 243, Volume No. 333 of December 23, 1996, which was repealed by the SP Law, will continue to maintain their right to the transfer certificate.

In the cases of affiliates opted into the Pension Savings System who register a minimum contribution time of ten years, the transfer certificate shall be paid in three installments payable annually from the date of enjoyment thereof, with unpaid balances accruing interest at a rate equivalent to the variation of the consumer price index. Affiliates who register contribution times of less than ten years will receive the total amount in a single payment.

All those persons who incorporate into the SAP, having registered a minimum of twelve contributions in the SPP, on the date of their transfer, shall have the right to this recognition, provided that said contributions have been made until the expiration of the term indicated in the sixth paragraph of this article.

The treatment to be given to contributions made subsequently will be done in accordance with what is established in the respective regulation. Notwithstanding the foregoing, for affiliates who transferred to the SAP, according to the transitional provision issued through Legislative Decrees Nos. 249 and 369, the contributions made to the SPP will be considered up to the month prior to the date of their transfer. Said contributions may be continuous or discontinuous and may have been made at any time, during the validity of the IVM programs administered by the ISSS and the INPEP. In case of simultaneity in contributions to both institutions, the procedure will be in accordance with what is established in Article 30 of these Standards.

The CT will be recognized or its equivalent value will be paid when the affiliate meets the requirements established by the SAP Law to obtain a benefit, upon prior request by the same.

For calculation purposes, the deadline dates for transfer to the SAP are the following:
a) Until October 15, 1998, for the population obliged to transfer to the SAP, that is, that for calculation purposes of time for the CT, it will be taken up to the month of September 1998; and b) Until April 15, 1999, for affiliates who had to choose between remaining in the SPP or transferring to the SAP, that is, that for calculation purposes of time for the CT, it will be taken up to the month of March 1999.

Service times in the public sector before the creation of the INPEP Art. 5.- Notwithstanding what is established in Article 4 of these Standards, those who have contributed to the INPEP for a minimum period of one year and registered service time in the public sector as administrative workers, before November 2, 1975, or as teachers, before January 1, 1978, shall have said service time recognized, provided they were active on the date of creation of the INPEP or the teacher regime, as applicable.

If the affiliate was unemployed on the date of creation of the INPEP or the teacher regime, but registered service times prior to those, as an administrative worker or teacher of the public sector, to the dates established in the previous paragraph, and has re-entered active service subsequently as a public employee, said service times will be recognized to them, upon meeting any of the following conditions:
a) If the service time rendered is up to ten years, they must have contributed to the INPEP for a minimum period of ten years; b) If the service time rendered is greater than ten years and less than twenty, they must have contributed to the INPEP for a minimum period of five years; and c) If the service time is twenty years or more, they must have contributed to the INPEP for a minimum period of thirty months.

Information to the affiliate on the right to the CT Art. 6.- The AFPs must provide the affiliate with the necessary advice regarding the legal requirements to have the right to the CT, as well as its method of calculation and the probative documents that may be presented, in case of inconsistencies in the time and/or salaries that have served as the basis for said calculation.

The AFPs must have trained personnel to provide advice on the CT in all their agencies.

NSP-48
TECHNICAL STANDARDS ON FINANCING COMPONENTS OF BENEFITS, REGULATORY BASIC SALARY AND YEARS OF CONTRIBUTION Approval: 12/30/2022 Validity: 12/30/2022

CHAPTER II
RESPONSIBILITY RELATIVE TO THE FINANCING AND PAYMENT OF THE TRANSFER CERTIFICATE OR ITS EQUIVALENT VALUE

Financing and payment for an equivalent amount of the CT of affiliates included in Article 147 of the SP Law Art. 7.- For the workers referred to in Article 147 of the SP Law, the recognition will be for an amount equivalent to a CT whose calculation will be carried out by the AFP in accordance with what is established in Article 148 of the SP Law and these Standards, which will be credited to their CIAP, charged to the CGS, as provided in paragraph b) of Article P-44) approved by the Central Bank through its Committee of Norms. (3)

In the cases of affiliates opted into the Pension Savings System who register a minimum contribution time of ten years, the transfer certificate shall be paid in three installments payable annually from the date of enjoyment thereof, with unpaid balances accruing interest at a rate equivalent to the variation of the consumer price index. Affiliates who register contribution times of less than ten years will receive the total amount in a single payment.

For the case of affiliates obliged to the SAP with the right to balance return, the payment of the CT will be made in a single amount. (3)

Art. 8.- It will be applicable to the payment for an amount equivalent to that of the CT of affiliates included in Article 147 of the SP Law, insofar as Chapters I, II, IV, V, VI of Subtitle II of these Standards are concerned.

Once the equivalent value to which the affiliate is entitled charged to the CGS is calculated, the AFP will proceed in accordance with what is established in Article 15 of the Technical Standards -44) issued by the Central Bank through its Committee of Norms, this value will be credited in the CIAP of the affiliate subsequently after the Superintendence has indicated the congruence of the data.

SUBTITLE II
ON THE REPORT OF WORK HISTORY AND PRELIMINARY AMOUNT OF THE TRANSFER CERTIFICATE

CHAPTER I
ON THE REVIEW OF THE WORK HISTORY REPORT OF AFFILIATES INCLUDED IN ARTICLES 147 OF THE SP LAW

Art. 9.- The Pension Institutes, through the UAIHL, will facilitate to the affiliates who transferred to the SAP, the reconstruction of the HL for the calculation of the CT, when the affiliate has the right to it.

When an affiliate to the SP or their beneficiaries request a benefit from the AFP in accordance with what is established in the SP Law, the latter must inform them about the process of HL reconstruction, which is the basis for the calculation of the CT, when there is a right to it which will be carried out through the UAIHL.

The AFP will give the affiliate or beneficiaries an appointment, through which it will indicate the place, day and hour, to start the referred process, which will end when the interested party manifests to be in agreement with the HL and signs as accepted or has manifested their acceptance, according to the channel of attention used, then the AFP will provide the preliminary calculation of the CT, and process its equivalent payment, when applicable.

Affiliates who, according to the HL report, do not have the right to CT, may also request the review of their HL before the UAIHL.

Requests for review of the HL report must be processed at the UAIHL, directly by the affiliate, their beneficiaries or their representatives, when applicable, with the respective documentation as established in Article 20 of the SP Law.

Art. 10.- In cases where the affiliate has contributed to both Institutes, the Pension Institution responsible for the issuance of the CT must consider, for the calculation, the periods and salaries contributed in both. For this effect, the Institutions must coordinate and provide each other with all the necessary information, either by electronic or documentary means.

Art. 11.- In accordance with Article 148 of the SP Law, once the CT is calculated, the affiliate may request a review in the period of one year, counted from the date of recognition thereof.

Documentation to be presented for the verification of service times or contributed salaries Art. 12.- The affiliate who is not in agreement with the information registered in the HL report and presents a request for review, may annex documents that prove the unregistered service times or the contributed salaries that correspond, in accordance with Article 20 of the SP Law.

Art. 13.- If the affiliate does not have the documentation to verify the times and/or contributed salaries, the Pension Institute must carry out the search for the information, taking as reference the data provided in the request for review.

NSP-48
TECHNICAL STANDARDS ON FINANCING COMPONENTS OF BENEFITS, REGULATORY BASIC SALARY AND YEARS OF CONTRIBUTION Approval: 12/30/2022 Validity: 12/30/2022

In case information is necessary to verify the declaration and payment of any pension contribution, this may be requested from the employers, who must provide it within fifteen business days following their request.

Art. 14.- The corresponding Pension Institute will resolve the requests for review of the HL that are made through the UAIHL, in accordance with the procedures and deadlines that are established in the respective regulation. When applicable, the amount of the CT must be recalculated and the database updated.

The Pension Institute or the UAIHL after resolving on the request for review, must notify the affiliate, within a period of five days, counted from the day following the issuance of the resolution.

CHAPTER II
ON THE REQUEST FOR THE TRANSFER CERTIFICATE

Situations that originate the right to the CT
Art. 15.- An affiliate may request through...