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Law to voluntarily withdraw compensation up to $25,000 begins



The Government Office supports the Voluntary Retirement Act, but believes the underlying problem lies in the lack of decent pensions.  /DEM.

The Government Office supports the Voluntary Retirement Act, but believes the underlying problem lies in the lack of decent pensions. /DEM.

On May 18, the Transitional Law on Economic Compensation for Voluntary Retirement of Retired Civil Servants or Pensioners of Administrative Branches, which are non-decentralized non-enterprise and self-governing bodies, went into effect.

The law will be published in the Official Gazette on May 18, 2023 and will take effect from the date of promulgation and will remain in force for six months after “coming into force”, as stated in Article 12 of the law.

The new law applies only to executive branches (ministries), decentralized non-commercial and autonomous organizations. It does not apply to judicial or legislative branches.

Decentralized institutions include the Salvadoran National Institute of Sport (Indes), the Salvadoran Institute for Women’s Development (Isdemu), the Salvadoran Export and Investment Promotion Agency (Proesa), and the National Directorate General of Local Public Works (DOM). ), which are within the budget of the President of the Republic.

There is also the Institute of Pensions of El Salvador (ISP), the University of El Salvador (UES), hospitals, the Institute of Social Security of El Salvador (ISSS), the Institute of El Salvadorian Vocational Training (Insaforp) and the National Registration Center (CNR). ), Telecommunications General Supervisory Authority (Siget), Animal Welfare Institute (IBA), El Salvador Institute of Tourism (Istu), etc.

The government has asked if the scheme applies to the National Charity Lottery (LNB), the Lempa River Hydropower Executive Board (CEL), the National Water and Sewerage Authority (Anda), and the Autonomous Ports Executive Board (CEPA). I haven’t clarified what. Enterprises are public.

During the approval of the law, Nuevas Ideas deputy Edgardo Murat congratulated the Anda workers who were “exchanging pipes” on the streets and the doctors and nurses “who have already reached retirement age and pension age”. represented. The lawmaker said the decree would apply to both pensioners and retirees, the former being those who are old but have not decided when to retire, according to politicians.

Here is a summary of the law:

  1. Compensation is calculated on the basis of the last salary earned and is paid up to $25,000, exempted from income tax and garnished for each year of service in a public sector agency or fraction over six consecutive months of service. not.
  2. Payments shall be made in two equal installments and the period between one payment shall not exceed thirty (30) days. The law does not specify when the first payment will be made.
  3. The resignation letter must be submitted to the Human Resources Department at least 30 days before November 2023, when the retirement law expires, in accordance with the Civil Service Law or the Teacher Training Law.
  4. Vacancies are only available with prior approval from the Ministry of Finance.

Source: Diario Elmundo

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