Technical Standards to Access the Benefit of Balance Refund for Serious Illness or Terminal Serious Illness in the Pension System

CNBCR-11/2022 NSP-46
TECHNICAL STANDARDS TO ACCESS THE BENEFIT OF BALANCE REFUND FOR SERIOUS ILLNESS OR TERMINAL SERIOUS ILLNESS IN THE PENSION SYSTEM 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, of December 20, 2022, published in Official Diary No. 241, Volume No. 437 of the 21st of the same month and year, the Comprehensive Law of the Pension System was approved.
II. That the first paragraph of Article 128 of the Comprehensive Law of the Pension System establishes that the affiliate, regardless of age and compliance with requirements to access a disability pension in a second ruling or old age, who is ruled by the Invalidity Qualifying Commission as suffering from a serious illness that significantly risks their life, may opt to request the refund of the balance of their Individual Savings Account for Pensions.
III. That the second paragraph of Article 128 of the Comprehensive Law of the Pension System establishes that in the case where the affiliate suffers from a terminal serious illness and this has been ruled by a private doctor or public institution doctor, the Invalidity Qualifying Commission must validate the medical ruling within 15 business days.
IV. That Article 129 of the Comprehensive Law of the Pension System establishes that affiliates who access the balance refund benefit as established in said Law, shall have the right to receive the refund of their contributions to the Solidarity Guarantee Account. Such refund shall be calculated as the sum of the values of each contribution, recognizing an interest rate equivalent to the variation of the Consumer Price Index from the date of each contribution until its refund.
V. That Article 131 of the Comprehensive Law of the Pension System establishes that the Central Bank of Reserve of El Salvador, through its Committee of Norms, will issue the necessary Technical Standards that allow the development of what is established in Chapter VII of the referred Law.
VI. That Article 159 of the Comprehensive Law of the Pension System establishes that the Central Bank of Reserve of El Salvador will issue the necessary Technical Standards that allow the development of what is established in the referred Law.

THEREFORE,

in virtue of the normative powers conferred by Article 99 of the Law of Supervision and Regulation of the Financial System,

CNBCR-11/2022 NSP-46
TECHNICAL STANDARDS TO ACCESS THE BENEFIT OF BALANCE REFUND FOR SERIOUS ILLNESS OR TERMINAL SERIOUS ILLNESS IN THE PENSION SYSTEM Approval: 12/30/2022 Validity: 12/30/2022

AGREES to issue the following:

TECHNICAL STANDARDS TO ACCESS THE BENEFIT OF BALANCE REFUND FOR SERIOUS ILLNESS OR TERMINAL SERIOUS ILLNESS IN THE PENSION SYSTEM

CHAPTER I
OBJECT, SUBJECTS AND TERMS

Object
Art. 1.- The object of these Standards is to establish the procedure that Pension Fund Administrators must carry out, regarding the benefit of balance refund for serious illness or terminal serious illness, stipulated in Article 128 of the Comprehensive 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) Central Bank: Central Bank of Reserve of El Salvador; d) CGS: Solidarity Guarantee Account; e) 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 credited. Additionally, the Transfer Certificate and the accumulated balance in the Social Housing Fund will form part of the Individual Savings Account for Pensions, when applicable; f) Invalidity Qualifying Commission: Entity created by Article 104 of the Comprehensive Law of the Pension System that enjoys autonomy regarding the knowledge and qualification 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. Likewise, it rules whether an affiliate suffers from serious illness or validates the medical ruling for terminal serious illness, to be able to access the balance refund benefit for serious illness or terminal serious illness as regulated in Article 128 of the Comprehensive Law of the Pension System; g) CT: Transfer Certificate or its equivalent value;

CNBCR-11/2022 NSP-46
TECHNICAL STANDARDS TO ACCESS THE BENEFIT OF BALANCE REFUND FOR SERIOUS ILLNESS OR TERMINAL SERIOUS ILLNESS IN THE PENSION SYSTEM Approval: 12/30/2022 Validity: 12/30/2022

h) Days: When used for a term, it shall be understood that it refers to calendar days; i) Executed Ruling: Ruling issued by the Invalidity Qualifying Commission, regarding which fifteen business days have passed after notification to the parties, without a complaint having been received against it, or if a complaint has been presented, it has been resolved by the Invalidity Qualifying Commission; j) DUI: Unique Identity Document; k) Retirement Age: Age completed that enables an affiliate to opt for a benefit for old age, according to what is established in Article 96 of the Comprehensive Law of the Pension System; l) FSV: Social Housing Fund; m) INPEP: National Institute of Pensions of Public Employees; n) INPEP Number: Number granted by the National Institute of Pensions of Public Employees to its affiliates, prior to the entry into force of the Law of Creation of the Salvadoran Institute of Pensions. o) ISP: Salvadoran Institute of Pensions; p) ISSS: Salvadoran Social Security Institute; q) SP Law: Comprehensive Law of the Pension System; r) System: Pension System; s) SPP: Public Pension System; t) Superintendence: Superintendence of the Financial System; u) UAIHL: Comprehensive Unit for Attention to Work History; and v) Identity Document: It may be the Unique Identity Document, Minor's Card, Passport, or Resident Card, as applicable.

CHAPTER II
REFUND OF BALANCE FOR SERIOUS ILLNESS OR TERMINAL SERIOUS ILLNESS

Application for balance refund for serious illness or terminal serious illness Art. 4.- The affiliate who is ruled by the Invalidity Qualifying Commission as suffering from a serious illness that significantly risks their life, may request the refund of the balance of their CIAP. Likewise, those affiliates who are ruled with a terminal serious illness by a private doctor or Public Institution doctor may access the benefit of refund of the CIAP balance. In the latter case, the AFP must manage with the Invalidity Qualifying Commission the appointment for the preliminary interview with the treating doctor, which must be assigned by the Invalidity Qualifying Commission within a period of three business days, the AFP sending the digitized application and the ruling of the private doctor or public institution doctor by email and subsequently within a maximum period of three business days sending the original application and the ruling in original from the private doctor or public institution doctor, to the administrative offices of the Invalidity Qualifying Commission, adding the existing file and other medical records provided if any, duly listed. The benefit of balance refund for serious illness or terminal serious illness, will apply to affiliates who, regardless of their age and compliance with requirements to access a disability pension in a second ruling or old age, have a balance in their CIAP. For those affiliates who request the benefit of balance refund for serious illness or terminal serious illness and are not pensioned for disability or in the process of granting said benefit, they must additionally request from the Invalidity Qualifying Commission, the evaluation so that it can qualify the corresponding degree of disability. In these cases, the Invalidity Qualifying Commission will issue the first disability ruling and the ruling of determination of serious illness or the validation of the medical ruling for terminal serious illness. Art. 5.- The applications to initiate the procedure for the benefit of balance refund for serious illness or terminal serious illness must be available to affiliates in the offices of the AFPs or through the electronic means they make available to their affiliates. Any affiliate wishing to access the benefit of balance refund for serious illness or terminal serious illness must initiate the procedure with the signing of the corresponding application. In the event that the affiliate is unable to carry out this procedure personally, they may be represented by an attorney. In case of appearing through an attorney, they must present their identity document and a power of attorney with a special clause to process the balance refund before the AFP. Art. 6.- For the purpose of requesting the benefit of balance refund for serious illness, the affiliate must present to the AFP in which they are affiliated, the following applications:
a) Application for Determination of Serious Illness, which will be required for the issuance of the ruling by the Invalidity Qualifying Commission and according to the procedure established for the Qualification of the Degree of Disability and Determination of Serious Illness to Rule on the Right to Disability Pension and to Balance Refund for Serious Illness by the Invalidity Qualifying Commission (NSP-45) issued by the Central Bank through its Committee of Norms; and b) Simultaneously with requesting the ruling of determination of serious illness, the affiliate must present the application named Application for Balance Refund for Serious Illness or Terminal Serious Illness. The procedure for the application for balance refund for serious illness, as established in Article 128 of the SP Law, will proceed in the case that the Invalidity Qualifying Commission rules the affiliate as suffering from a serious illness that significantly risks their life. Art. 7.- In the case that the application is for the benefit of terminal serious illness, the affiliate must present to the AFP in which they are affiliated, the following applications:
a) Application for Validation of Medical Ruling for Terminal Serious Illness, which will be required for the validation of the ruling to be carried out by the Invalidity Qualifying Commission and according to the procedure established in the Technical Standards for the Qualification of the Degree of Disability and Determination of Serious Illness to Rule on the Right to Disability Pension and to Balance Refund for Serious Illness (NSP-45) issued by the Central Bank through its Committee of Norms; and b) Simultaneously with requesting the validation of the ruling of determination of terminal serious illness, the affiliate must present the application named Application for Balance Refund for Serious Illness or Terminal Serious Illness. The procedure for the application for balance refund for terminal serious illness, as established in Article 128 of the SP Law, will proceed in the case that the Invalidity Qualifying Commission validates the medical ruling made by a private doctor or public institution doctor, in which it is established that the affiliate suffers from a terminal serious illness. Content of the application for balance refund for serious illness or terminal serious illness Art. 8.- The application for balance refund for serious illness or terminal serious illness must contain as a minimum the following information:
a) Logo and full name of the AFP; b) Name of the application or form; c) Number of the application or form, as applicable; d) Affiliate data:
i. Affiliate's name;
ii. Affiliate's sex;
iii. ISSS or INPEP affiliation number, 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's situation:
i. Labor relationship (dependent or independent contributor, unemployed);
f) Place and date of submission of the application; g) Signature of the affiliate or of the person authorized by the affiliate, to sign on their behalf the application for balance refund for serious illness or terminal serious illness; and h) Stamp and signature of the employee authorized by the AFP to receive the application. 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 smudges, strikethroughs or any other alteration of it.
Annex documents of the application
Art. 9.- The application must be accompanied by the following documents:
a) Copy of identity document (DUI for nationals and passport or residence card for foreigners); and affiliation document to ISSS or INPEP, or both, if they have them; b) Medical ruling made by private doctor or public institution doctor for cases of application for balance refund for terminal serious illness; and c) Corresponding ruling or validation of ruling made by private doctor or public institution doctor, issued by the Invalidity Qualifying Commission, which must be presented once it is issued by the Invalidity Qualifying Commission. The AFP, for the process of receiving applications, may make electronic means available to the affiliate, the application will be formalized with the signature of the affiliate. Conditions applicable to the documents to be presented Art. 10.- The documents to be attached to the application presented by affiliates must meet the following conditions:
a) Identity documents such as DUI, Passport or residence card must be valid on the date of the application; b) Of the requested documents, both copies and originals must be presented, this in order to carry out the corresponding validation. In the case that the procedure is carried out by an attorney, notarially certified copies may be presented, which substitute the presentation of the original documents; and c) The copies of the documents presented must be legible and in good condition.

Of the review of the application
Art. 11.- The AFP will verify the content of the application and the compliance with the requirements to opt for the benefit of balance refund for serious illness or terminal serious illness, established in Article 128 of the SP Law. Received in form the application according to what is established in articles 8 and 9 of these Standards, the AFP will proceed to verify the compliance with the requirements established in the SP Law to access the benefit of balance refund for serious illness and in case the affiliate does not comply with any of the requirements, the AFP will reject the application, notifying and explaining to the affiliate the cause of the rejection within a maximum period of five business days following the date on which it was resolved to reject the application. In the cases where the balance refund applications are for terminal serious illness, the AFP must notify the rejection of the application within a maximum period of two business days following the date on which it was resolved to reject the application. Work History Art. 12.- If the affiliate has contributions in the SPP, the AFP must provide them with the appropriate advice so that they can initiate the corresponding procedures for the review of the Contribution History to the SPP, assigning them an appointment at the ISP. This process will end with the signing of the Act of Acceptance of the Work History, document that must be presented as an annex to the application to initiate the procedure for the application for balance refund for serious illness or terminal serious illness. The affiliate must review the Work History provided by the AFP, which proves and verifies the registration of the contribution times. In case the affiliate does not agree with the information registered in their Work History, they must request the review and the corresponding management to the AFP. Procedure for transfers of funds to the CIAP Art. 13.- If the affiliate meets the requirements to access the balance refund established in Article 128 of the SP Law and if they have contributed to the SPP, the AFP will manage the issuance and payment of the CT in accordance with articles 147 and 148 of the SP Law, and the Technical Standards (NSP-44), approved by the Central Bank through its Committee of Norms. For the case of affiliates included in article 149 of the SP Law, who have the right to receive CT and who opt for the balance refund for serious illness, the amounts equivalent to the CT, they will receive in accordance with what is established in article 147 of the SP Law.

CNBCR-11/2022 NSP-46
TECHNICAL STANDARDS TO ACCESS THE BENEFIT OF BALANCE REFUND FOR SERIOUS ILLNESS OR TERMINAL SERIOUS ILLNESS IN THE PENSION SYSTEM Approval: 12/30/2022 Validity: 12/30/2022

In case of the affiliates referred to in the previous paragraph who receive the CT in three installments payable annually, the components of the CIAP must be delivered when the first CT payment is made. In case of death of the affiliate, prior to the CT being fully disbursed, the pending annual payments will follow the rules of common law in matters of succession. The AFP must request the transfer of funds accumulated by the affiliate in the FSV, for cases where applicable, according to the respective regulations. Such funds will be credited to the affiliate's CIAP prior to carrying out the calculation of the balance refund. Art. 14.- If the affiliate requests the refund of the balance for suffering from terminal serious illness, as established in the second paragraph of Article 128 of the SP Law and if they have contributed to the SPP, the AFP will apply the process and deadlines established in the second paragraph of this article. The AFP will manage with the ISSS and the ISP, as applicable, the issuance and payment of the CTs. These institutions must transfer the corresponding information within a period of fifteen days and the balance must be refunded within a maximum period of thirty days. In case of death of the affiliate, prior to the CT being disbursed, the pending balance to be disbursed will follow the rules of common law in matters of succession. Within the maximum period of thirty days established in the previous paragraph, the AFP must request the transfer of funds accumulated by the affiliate in the FSV, for cases where applicable, according to the respective regulations, such funds will be credited to the affiliate's CIAP prior to carrying out the refund of the CIAP components. Voluntary contribution to ISSS Art. 15.- In case the affiliate is managing the benefit of balance refund for serious illness or terminal serious illness, the AFP must issue a certificate or similar document so that they can contribute voluntarily in the Regime of Benefits for Illness, Maternity and Professional Risks of the ISSS and enjoy the health benefits coverage granted by said Institute.

CHAPTER III
PROCEDURE FOR CALCULATION OF THE BALANCE REFUND FOR SERIOUS ILLNESS OR TERMINAL SERIOUS ILLNESS AND RESOLUTION OF THE APPLICATION

Components of the CIAP
Art. 16.- Once the application is received and the AFP has verified that the affiliate complies with what is established in Article 128 of the SP Law, specifically for the case of serious illness, the AFP must determine the amount of the CIAP with the components

which will be used to determine the amount to be refunded, within a maximum period of five business days following the date of accreditation of the CT and the balance of the FSV in the affiliate's CIAP.

For the calculation of the CIAP amount, the CT and contributions made to the FSV must be incorporated when applicable; these components must be accredited in the affiliate's CIAP.

In the case of affiliates referred to in Article 147 of the Pension Law (SP Law), they will receive an amount equivalent to the CT, provided they comply with what is established in said article.

In the case of affiliates who request the refund of the balance due to terminal serious illness, the AFP must determine the amount of the CIAP to be refunded within a maximum period of five business days following the notification of the validation of the medical report issued by the Invalidity Assessment Commission. The other components of the CIAP must be refunded within a maximum period of thirty days, provided that such components are accredited in the CIAP.

Accreditation of CIAP Components

Art. 17. For the purposes of calculating the balance refund for serious illness or terminal serious illness, the amount of the CIAP will be determined as of the date the calculation is performed, plus the issued value of the CT and the balance of the FSV, if applicable.

Calculation of Contributions Made to the CGS

Art. 18. In accordance with what is established in Article 129 of the SP Law, affiliates who access the benefit of balance refund for serious illness or terminal serious illness, who have made contributions to the CGS, will have the right to receive the refund of said contributions, plus a recognition of an interest rate established in accordance with the article related to the beginning of this provision.

To perform the calculation of the refunds of contributions to the CGS, the AFP must follow the Technical Standards for the Granting of Benefits by NSP-43 and Management of the NSP-44 Account), approved by the Central Bank through its Standards Committee.

The balance to be taken into account will be that of the last day of the month prior to when the request was submitted.

Payment of the Balance Refund

Art. 19. The refund must be cancelled by credit to an account in the name of the affiliate, at the financial entity established by the affiliate, which will be carried out through a single disbursement and must be effected no later than five days from the acceptance of the resolution by the affiliate; in exceptional cases, the payment may

CNBCR-11/2022 NSP-46
TECHNICAL STANDARDS TO ACCESS THE BENEFIT OF BALANCE REFUND FOR SERIOUS ILLNESS OR TERMINAL SERIOUS ILLNESS IN THE PENSION SYSTEM Approval: 30/12/2022 Validity: 30/12/2022

be made via non-negotiable check.

In cases of balance refund for terminal serious illness, the amount of the CIAP must be paid within a period of five business days following the notification of the validation of the medical report by the Invalidity Assessment Commission, and the other components of the CIAP must be refunded within a maximum period of thirty days.

In the event of the affiliate's death, prior to the total disbursement of the CIAP and its components, the rules of common law in matters of succession must be followed.

In the case of affiliates referred to in Article 147 of the SP Law who opt for the balance refund for serious illness, the balance corresponding to the CT will be received by them in accordance with what is established in said article of the SP Law.

The AFP must issue a Resolution of balance refund, which must be signed by the person delegated by the AFP's Board of Directors for such effect, and attach an updated Individual Account Statement.

The Resolution must establish that the affiliate has been warned of the consequences on the payment of the pension, in case they are pensioned, as well as the corresponding effects regarding issues related to work history. Additionally, the Resolution must highlight that if the affiliate had previously exercised the right to access the balance of their CIAP in advance, the provisions of Article 130 of the SP Law will apply.

The affiliate must sign the Resolution, acknowledging receipt of the consequences derived from the use of the balance refund benefit for serious illness or terminal serious illness, established in Article 128 of the SP Law.

In the event that the affiliate is unable to sign the resolution, they may have an attorney sign on their behalf, through a power of attorney with a special clause stating the authority to process the balance refund for serious illness or terminal serious illness, provided that the AFP proves the survival of the affiliate by the means it deems appropriate.

Art. 20. The AFP will be responsible for keeping a record to control the balance refunds of the CIAP for serious illness or terminal serious illness referred to in these Standards.

CHAPTER IV
OTHER PROVISIONS AND VALIDITY

CNBCR-11/2022 NSP-46
TECHNICAL STANDARDS TO ACCESS THE BENEFIT OF BALANCE REFUND FOR SERIOUS ILLNESS OR TERMINAL SERIOUS ILLNESS IN THE PENSION SYSTEM Approval: 30/12/2022 Validity: 30/12/2022

Use of Electronic Means or Channels

Art. 21. All procedures in which the affiliate can be facilitated an electronic means or channel to manifest their will to accept or reject the aforementioned Technical Standards for the Expansion of Attention Channels in Pension Systems Through Technological Means NSP-68), issued by the Central Bank through its Standards Committee.

Operation Codes

Art. 22. Balance refunds for serious illness or terminal serious illness will be identified in the Individual Savings Accounts for Pensions with the movement codes described in Annex No. 1 of these Standards.

AFP Advisory to their Affiliates

Art. 23. The AFP must provide adequate advice to the affiliate regarding what it means to opt for the balance refund for serious illness or terminal serious illness, leaving the affiliate duly informed about the same.

For these purposes, adequate advice will be understood as the AFP having explained to the affiliate the implications of opting for the balance refund for serious illness or terminal serious illness, at least in the following aspects:
a) Work history; b) Consequences on pension payment; c) Treatment of the amount equivalent to the CT of affiliates included in Article 147 of the SP Law; and d) Beneficiaries.

Reactivation in the System

Art. 24. Affiliates who have enjoyed the benefit of balance refund for serious illness or terminal serious illness and subsequently recover their health, may reactivate their contributions to the System, must comply with the requirements established in the SP Law to have the right to the benefits established therein.

For the calculation of the benefits established in the SP Law, the AFP must take into consideration the work history generated by the affiliate from the reactivation of their contributions to the System.

Transitional Voluntary Contributions

Art. 25. In the case of affiliates who access the benefit of balance refund for serious illness or terminal serious illness and have registered voluntary contributions within the CIAP, the AFP must incorporate within the affiliate's balance refund, the amount of the voluntary contributions and their profitability, provided that the affiliate has not opted to transfer them to a Voluntary Pension Savings Fund.

Transitional for the Substitution of the Unique Pension Number for the

CNBCR-11/2022 NSP-46
TECHNICAL STANDARDS TO ACCESS THE BENEFIT OF BALANCE REFUND FOR SERIOUS ILLNESS OR TERMINAL SERIOUS ILLNESS IN THE PENSION SYSTEM Approval: 30/12/2022 Validity: 30/12/2022

Unique Identity Document Number

Art. 26. The AFPs will have a period of 90 days to make the corresponding adjustments related to the substitution of the Unique Pension Number for the Identity Document Number in Systems, forms, or others in which they apply said change.

Repeal

Art. 27. of Balance Refund for Serious Illness or Terminal Serious Illness in the -09) approved by the Central Bank through its Standards Committee, in Session CNBCR-05/2018, dated May 30, 2018.

Sanctions

Art. 28. Non-compliance with the provisions contained in these Standards will be sanctioned in accordance with what is established in the Law of Supervision and Regulation of the Financial System.

Unforeseen Aspects

Art. 29. Unforeseen aspects in regulatory matters in these Standards will be resolved by the Central Bank through its Standards Committee.

Validity

Art. 30. These Standards will enter into force as of December 30, 2022.

CNBCR-11/2022 NSP-46
TECHNICAL STANDARDS TO ACCESS THE BENEFIT OF BALANCE REFUND FOR SERIOUS ILLNESS OR TERMINAL SERIOUS ILLNESS IN THE PENSION SYSTEM Approval: 30/12/2022 Validity: 30/12/2022

ANNEX No. 1

MOVEMENT CODE IN THE CIAP TO IDENTIFY BALANCE REFUNDS FOR SERIOUS ILLNESS

Type Code
Adjustment
Indicator
Reversal
Indicator
Concept Type Code
Adjustment
Indicator
Reversal
Indicator
Concept
A 120 Adjustment of Reversal of
Refund of balance for serious illness.
C 120 Adjustment of
Refund of balance for serious illness.

MOVEMENT CODE IN THE CIAP TO IDENTIFY BALANCE REFUNDS FOR TERMINAL SERIOUS ILLNESS

Type Code
Adjustment
Indicator
Reversal
Indicator
Concept Type Code
Adjustment
Indicator
Reversal
Indicator
Concept
A 138 Adjustment of Reversal of
Refund of balance for terminal serious illness.
C 138 Adjustment of
Refund of balance for terminal serious illness.