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INTEGRAL LAW OF THE PENSION SYSTEM
[/vc_column_text][us_separator][vc_column_text] On December 20, the Legislative Assembly approved the New Comprehensive Pension System Law, which will enter into force eight days after its publication in the Official Gazette. This new regulatory framework describes and develops the rules that will be applicable to the administration of resources destined for the payment of benefits that will be recognized to members, to cover common risks of old age, disability, and death. Thus, this new Law establishes that all individuals who withdrew the 25% advance payment of their balance do not have to repay it or work longer to receive a pension. In this sense, it is established that individual pension savings accounts will be managed by the Administrators, who, in turn, are authorized by the State to manage the System and will be supervised by the Superintendency of the Financial System. Thus, Article 6 establishes that affiliation to the system will be individual, regardless of whether or not the individual is currently employed. Furthermore, according to Article 8, it will be mandatory when a person enters a subordinate position. Among the most important changes to be taken into consideration, introduced by this new law, we should mention:
- Elimination of the maximum contributory salary:The calculation of the discounts and contributions to the pension system must be made on 100% of the salary, regardless of the amount, in the terms set forth in Article 14 of the Law;
- Obligation for all workers with labor subordination to contribute, even those who have received some old-age benefit:Any person who maintains a subordinate employment relationship and provides services under this modality must contribute to the pension system, even those who already receive a pension.
People who are pensioners with ISSS and INPEP and who are not currently contributing to the pension system must join an administrator to contribute.
- Employer contribution payable, even when the contract is suspended due to maternity, illness, or accident due to common or occupational risk:In these cases, the ISSS will deduct the worker's corresponding amount from the subsidy, and the company will be responsible for covering the corresponding 8.75%, calculated on the amount of the subsidy received by the worker. Similarly, and as established in Article 16, it is established that, under no circumstances, may the 1% increase in the employer's contribution be passed on to the worker under any circumstances.
Likewise, Article 22 establishes that failure to declare and pay will be considered a failure to report and pay when the employer fails to comply with this obligation within the legal deadline for those employees included on the payroll for a previous month of pay, without having reported changes in the employment relationship. This Law also sets out the obligations and functions of Pension Fund Administrators; the benefits under the fund—old-age, disability, and survivors' pensions; voluntary pension savings; the sanctions regime; and the general and transitional provisions. [/vc_column_text][us_separator][vc_column_text]Written by: Lic. Valeria García [/vc_column_text][/vc_column][/vc_row]
