Regulations on Contributions and Quotas of INPREMA

This Regulation develops the provisions contained in Article 28 of the Law of the National Teaching Welfare Institute (INPREMA) relating to employer contributions and participant contributions, being, in both cases, contributions to the Pension Fund. Both financial resources received by INPREMA serve to finance the benefits under its responsibility, the operational and administrative expenses necessary to achieve its objectives, with efficiency and effectiveness.

The resources generated by the contributions and quotas received by INPREMA may be invested by it in securities or financial assets or in other assets of a different nature, with its returns accruing to the Pension Fund, provided that such investments are made under optimal conditions of security, profitability and without affecting its stability, solvency and liquidity, so that the Institute may comply promptly with its obligations.

For the purposes of this Regulation, the concepts indicated below have the following meaning:

• a)

  Affiliate: Persons who according to Law are protected by INPREMA, these being active teachers and retired and pensioned teachers.

• b)

  Contributions: Mandatory contribution that employers must transfer monthly to INPREMA, and those made by the voluntary participant to cover the corresponding employer proportion, calculated in the manner provided by the Law and this Regulation.

• c)

  Contributors: For the purposes of the preceding item, employers and consequently contributors to the Pension Fund are the following:

  • 1)

    The State, acting through the Secretaries of State in the Offices of Education and Finance, within the scope of their competence;

  • 2)

    Private or non-governmental entities providing preschool, primary or secondary education, whether or not they receive state or municipal subsidies of any amount or type, and must be incorporated into the Institute;

  • 3)

    Where applicable, public or private entities providing higher education that are incorporated into the Institute or that, at their request, are incorporated later.

• d)

  Assembly: Assembly of Participants and Contributors of INPREMA.

• e)

  Commission: National Commission of Banks and Insurance.

• f)

  Contribution: Periodic monetary amount with which the participant contributes to the Institute, and which is deducted from their contribution-subject salary. This includes the amount of money that exceptionally enters through the participant who has voluntarily enrolled.

• g)

  Contributors: Contributors to the National Teaching Welfare Institute are active teachers serving in their capacity as formal education workers, who shall be affiliated from the moment of their appointment; and retired and pensioned teachers.

• h)

  Directory of Specialists or Directory: Directory of Specialists for the Administration of INPREMA.

• i)

  Teacher: One who teaches, administers, organizes, directs or supervises educational work in public or private centers of formal education and who sustains teaching as a profession, or the person who meets any of the following requirements:

  • 1)

    that their salary received as remuneration for their services be determined in accordance with the Honduran Teaching Statute;

  • 2)

    that the practice of teaching in the national educational system, according to the Fundamental Law of Education or other applicable norms, is their principal occupation. Those who perform similar functions in higher education entities incorporated into INPREMA are also teachers.

• j)

  Fund: The set of accumulated resources, product of INPREMA operations and which constitute the patrimony of the Institute.

• k)

  Pension Fund: Economic patrimony of INPREMA constituted by employer contributions, participant contributions, the returns generated by the investment of these values and other resources provided for in the Law, which is destined to finance the pension system, once the administrative and operational costs efficiently incurred are deducted, in accordance with the budget approved for such purposes.

• l)

  Administrative Expenses: Those incurred by INPREMA in concept of salaries or other personal services, materials and supplies, maintenance of assets or equipment, payment of public services, professional fees, reserves for uncollectible loans, depreciation and amortization and any other necessary expense for its operation.

• m)

  Operational Expenses: Direct expenses that are inherent to the objective or purpose of the Institute, related to the payment of retirements, pensions, separation benefits or other pension benefits. Indirectly, administrative expenses, being linked to the purpose of INPREMA, constitute a modality of operational expenses.

• n)

  INPREMA or Institute: National Teaching Welfare Institute. o) Investments: Operations carried out by the Institute with Pension Fund resources, seeking its patrimonial capitalization and economic benefit in a sustainable manner over time, under optimal conditions of security, profitability, solvency and liquidity, whether through fixed income, variable income or a combination of both, complying with the limits and other norms issued by the National Commission of Banks and Insurance, as regulatory body, and with supplementary provisions on the matter. p) CPI: Consumer Price Index defined by the Central Bank of Honduras. q) Law: Law of the National Teaching Welfare Institute and its reform Decree 247-2011 of December 14, 2011 and Decree 267-2013 of December 16, 2013 respectively; and any other reforms that may be issued. r) Participants: Teachers affiliated with INPREMA, who may be:

  • 1)

    Active Participants, when they perform their teaching functions in the public or private education system, paying their respective contributions;

  • 2)

    Voluntary Participants, when having ceased to practice teaching they have not withdrawn from the System and continue voluntarily paying their contributions, plus the contributions that would otherwise correspond to their employers;

  • 3)

    Suspended Participants, if they have ceased to practice teaching and have not withdrawn from the System, maintaining the expectation of re-entry into the teaching function;

  • 4)

    Inactive Participant, any person who ceases to work as a teacher in the educational system and to whom the separation benefit has been granted. s) Benefits: Pensions payable in money by INPREMA, whose purpose is the protection of participants against contingencies arising from old age, disability or death, or of their beneficiaries, as appropriate. t) Base Salary: Amount of the initial salary paid to a primary education teacher newly entering as a teacher to the educational system, according to the Honduran Teaching Statute and as provided in Article 130 of the Law. Starting from this salary, each teacher's contribution-subject salary is determined, without exceeding the upper limit, updated annually by inflation, as provided in Article 3, numerals 25) and 26) of the Law and in item t) of this article. u) Contribution-Subject Salary: Nominal monthly remuneration earned by the participating teacher in the System, including the thirteenth and fourteenth months, which serves as the basis for calculating the employer contribution and individual contribution. Amounts that the participant receives occasionally and by mere liberality or those received in money or in kind as representation expenses or other payments corresponding to the performance of a specific service, nor additional bonuses or compensations for extraordinary working hours, do not form part of the contribution-subject salary. The contribution-subject salary may not exceed three times the basic salary established in accordance with the

of the Law, readjusted on the basis of the year-over-year variation observed in the consumer price index officially published by the Central Bank of Honduras. v) Pension System: Pension system administered by INPREMA in accordance with the Law. w) Securities: Transferable titles or documents, including bonds, shares, certificates of deposit, stocks, promissory notes, participation certificates, futures, options and other derivatives and, in general, any security or investment title or other transferable obligations authorized by the National Banking and Insurance Commission. CHAPTER II CONTRIBUTIONS AND QUOTAS SECTION A CONTRIBUTIONS

CONTRIBUTIONS AND THEIR AMOUNT. It is the responsibility of employers in the public or private system of national education to make a monthly payment in the form of employer contribution of twelve percent (12%) of the contribution salary of each one of the teachers in their service, in their condition as active participants. Said percentage is subject to future variations or modifications contemplated in the Law.

CONTRIBUTORS. For the purposes of the preceding article, employers and consequently contributors to the Pension Fund are the following:

• a)

  The State, acting through the Secretariats of State in the Departments of Education and Finance, within the scope of their competence;

• b)

  Private or non-governmental entities of preschool, primary or secondary education, whether or not they receive state or municipal subsidy of any amount or type, and they must be incorporated into the Institute;

• c)

  As applicable, public or private entities of higher education that are incorporated into the Institute or that, upon their request, are incorporated subsequently.

MINIMUM LIMIT OF CONTRIBUTIONS AND ANNUAL UPDATING. The amount of the contribution that each employer must pay for each one of the active participants in their service shall in no case be less than four percent (4%) of the Base Salary established in the Law, as this concept is defined in Article 3, literal s) of this Regulation. In accordance with the second paragraph of Article 28, as amended, of the Law, the value corresponding to that lower limit shall be readjusted by the Board of Specialists, upon request of the corresponding hierarchical level and shall authorize it by means of internal communication within the first three months of each year, using for this purpose the year-over-year variation of the consumer price index (CPI), officially published by the Central Bank of Honduras at the close of the month of December of the previous year. For general knowledge, INPREMA must publish annually the Contribution Subject Salary and its components where the Lower Limit is included through means of dissemination of national coverage, without prejudice to the sending of circulars to each one of the employers for the purposes of the case.

NON-TRANSFERABLE OBLIGATION OF THE EMPLOYER. The employer contribution referred to in the preceding articles is independent of the salary of the teachers affiliated with the System, being an exclusive obligation of the employer, such that it cannot be transferred under any circumstance to the participants. SECTION B CONTRIBUTIONS

CONTRIBUTIONS AND THEIR AMOUNT. Each active participant is required to pay monthly to INPREMA, as an individual contribution, eight percent (8%) of the salary subject to contribution that they receive, as defined in Article 3, subsection t) of this Regulation. Said contribution percentage is subject to future variations or modifications contemplated in the INPREMA Law.

WITHHOLDING OF CONTRIBUTIONS AND PAYMENT TO THE INSTITUTE. Each employer is responsible for the monthly withholding of contributions corresponding to each of the teachers in their employ, deducting them from the respective salary subject to contribution and subsequently remitting their amount to INPREMA, in accordance with the deadlines and procedures indicated in the Law and in this Regulation. Officials, employees, and legal representatives of public and private educational institutions, as well as representatives of other State entities that improperly appropriate or withhold without justification the deductions for contributions, employer contributions, as well as other obligations contracted with the Institute, shall incur the sanctions established in Article 113 of the Law. SECTION C COMMON PROVISIONS

APPLICATION OF TIERED PREMIUM. In order to recover or maintain the actuarial balance of INPREMA, the contribution rate to the System, understood as the amount of employer contributions and individual contributions provided for in Articles 4 and 8 above, is subject to periodic review and updating, according to the following rules: a) For participants who as of January 1, 2015 receive a nominal salary exceeding twenty thousand Lempiras (L20,000.00) per month, an annual increase of zero point twenty-five percent (0.25%) shall be applied to contributions and zero point five percent (0.5%) to employer contributions, from that date and in progressive form until January 1, 2020 inclusive, such that at the end of that period the percentages on the salary subject to contribution, of both kinds, shall be nine point five percent (9.5%) and fifteen percent (15%), respectively, all in accordance with what Article 123 of the Law provides for this purpose. b) In any case, the amount of employer contributions and individual contributions, on the basis provided for in Articles 28 and 123 of the Law, shall be adjusted by INPREMA every five years, or sooner if necessary, if this results from the Institute's actuarial studies, requiring for this purpose the amendment of the indicated articles; for this purpose, the Board of Specialists shall present a report on the matter to the Assembly of Participants and Contributors, and with the approval of the latter, the corresponding bill initiative shall be presented within the following thirty calendar days to the National Congress through the Secretaries of Education and Finance, as provided in the final paragraph of Article 26 of the Law.

LEGAL OBLIGATION OF PAYMENT. Payment of contributions by the State and by other employers incorporated into INPREMA is mandatory; individual contributions charged to active participants also have this character. Both are legal obligations, and therefore do not depend on the will of the employer or the teacher; they arise automatically from the commencement of the latter's provision of services and are maintained, without exception, for the entire duration of the employment relationship, whether in the public or private system of national education. Failure to comply with this obligation constitutes grounds for civil, administrative, and/or criminal liability as appropriate.

MANDATORY INCORPORATION OF PRIVATE EDUCATIONAL ENTITIES. For the purposes of the preceding article, private educational entities in the pre-basic, basic, and secondary levels are obligated to request their incorporation into INPREMA, which shall become effective from the beginning of their operations, according to authorization by the Secretary of Education, whether definitive or provisional; in the latter case, provisional authorization shall be evidenced by certification or official documentation issued by the competent authority, indicating that the definitive Executive Agreement is in process and also indicating the date when the educational center began operations. Incorporation into INPREMA is a necessary requirement for the aforementioned entities to conduct their educational activities.

REQUIREMENTS FOR INCORPORATION. With their request for incorporation, interested private entities shall accredit before INPREMA the following:

• a)

  Authenticated copy or official certification of the definitive Executive Agreement authorizing the operation of the educational center, or official certification or documentation issued by the competent authority accrediting that said Agreement is in process and that provisional authorization has been granted for the operation of the educational center, in addition to the date when its educational activities began;

• b)

  Their status as commercial companies, foundations, or other private entities with legally granted legal personality, or individual merchants, as appropriate;

• c)

  Their payroll or list, with indication of the names of the teachers, their identification card or other identification document if they are resident foreigners, and their respective salaries;

• d)

  Their National Tax Registry;

• e)

  A sworn declaration authenticated by Notary, stating that they assume mandatory payment of their employer contributions and the mandatory withholding of teacher contributions, as well as their remittance to INPREMA, in accordance with the Law and this Regulation;

• f)

  Their affiliation in an organization of non-governmental educational institutions, recognized by the State;

• g)

  Any other relevant information that may be required in the form that INPREMA shall provide for this purpose. For the purposes of subsection b) above, a photocopy of the corresponding document, authenticated by Notary, may be presented; the teacher payroll previously indicated shall be original, sealed, and signed by the person legally authorized to do so.

COVERAGE OF CONTRIBUTORS. Coverage of contributors arises from the affiliation of the teacher with the Institute, and as a result of the provision of their services at the educational center, as well as the payment of their respective contributions and employer contributions in the case of the employer. Contributors whose employers have fallen into arrears shall also be under coverage, provided that the latter have entered into a payment agreement formalized through the criteria established in the Resolution issued for this purpose by the Board of Specialists; notwithstanding, benefits shall be recognized and/or granted to affiliates in accordance with compliance with the agreement subscribed by the legal representative of the debtor educational center.

VOLUNTARY INCORPORATION OF HIGHER EDUCATION ENTITIES. Higher education entities or entities of university or specialized level, whether public or private, may voluntarily incorporate into INPREMA, prior to their request, accrediting their legal personality, operational authorizations, and the requirements established in Article 13 of this Regulation, excepting subsections "a" and "f" of said article. Upon admission of the proceeding, the request shall be subject to technical and actuarial evaluation by INPREMA and the Directory of Specialists, prior to a favorable opinion of the National Commission of Banks and Insurance, which shall resolve favorably or unfavorably, as provided in Article 24 of the Law, notifying the interested entity in a timely manner. If resolved favorably, the respective contributions and quotas shall be calculated and paid on the contributory salary basis of the contributors, as defined in the Law and in this Regulation, limiting to the amount thereof the higher nominal salaries that might be paid, so that no contribution or quota shall be paid on the excess of the contributory salary basis, which is understood without prejudice to the adjustment provided by tiered rate and future changes that this Regulation may be subject to.

CONTRIBUTIONS AND QUOTAS OF VOLUNTARY PARTICIPANTS. To be eligible for the social security benefits or provisions of the system indicated in Article 29, numerals 1 and 2 of the INPREMA Law, voluntary participants, as this condition is defined in Article 3, subsection q), numeral 2) of this Regulation, are obligated to pay to INPREMA their individual quotas and employer contributions using as the maximum calculation base the contributory salary basis in effect prior to the cessation of work and according to the amount that corresponds, whether by: coverage of risks of disability, old age and death or only disability and death, at the option of the interested party. This obligation arises from the admission of the latter as a voluntary participant, at their request and in accordance with what is opportunely resolved by INPREMA. For the foregoing purposes, the requirements and calculation basis for the amount of contributions and quotas shall be considered as established in the Manual of Policies and Procedures for Authorization of Voluntary Payment of Quotas and Contributions that the Directory of Specialists shall issue for such purpose. The interested party must submit their application for admission to this special regime within the year immediately following the date of their last quota as an active teacher.

IRREGULAR OR IMPROPER CONTRIBUTIONS OR QUOTAS. Irregular or improper contributions or quotas received by INPREMA do not generate any right with respect to system benefits, proceeding only their refund or reimbursement to the corresponding party, with their yields at the technical interest rate that the Institute generates annually, as a product of investments minus administrative costs and which shall be applicable in the period in which the quotas were made. Those resulting from fraudulent affiliations or those which, without fraud, are incorrect or irregular by affecting remuneration exceeding the maximum limit of the contributory salary basis, as indicated in Article 3, subsection t) of this Regulation, or which, in its case, result from other administrative errors or omissions, are considered to have this character, which is understood without prejudice to what is provided in Article 10, subsection a) above. If there is fraud in the affiliation, the refund shall be subject to what is resolved by the competent authority; if it is incorrect or irregular without fraud, INPREMA shall proceed to the aforementioned refund as soon as the overpayment is proven. In any case, the refund of improper contributions and quotas for exceeding the maximum limit of the contributory salary basis does not affect the rights that correspond to the participant on this basis; the same occurs when it is the refund of other irregular contributions or quotas, caused by omissions or different administrative errors. The Operations Department of INPREMA shall ensure the correct application of what is provided here. SECTION D COLLECTION MECHANISMS

REGISTRATION OF CONTRIBUTIONS. The amount of contributions that according to the Law correspond to the State shall be included as an annual allocation in favor of INPREMA in the General Budget of Income and Expenses of the Republic. Those corresponding to private education entities shall be registered obligatorily in their teaching staff payrolls approved by the Secretary of Education, and they must make spending provisions for this concept in their respective budgets. A similar obligation corresponds to higher education entities incorporated into INPREMA, with the modalities that are proper to them.

TRANSFER OR DEPOSIT OF CONTRIBUTIONS. The contributions charged to the State shall be noted, individualizing them for each participant, in the monthly payrolls to teachers working in the public education system. As provided in the second paragraph of Article 23 of the Law, monthly, within the first twenty (20) days following the payment date of the salaries or wages that correspond, the Secretary of Finance shall transfer its amount to the INPREMA account in the Central Bank of Honduras or in another banking institution designated for such purpose. The amount of monthly contributions charged to private education entities or to higher education entities incorporated into INPREMA shall be deposited by each one of them, individualizing at the appropriate time each one of the teachers, in the INPREMA banking account designated for such purpose, without prejudice to other collection mechanisms that may be provided; this payment, whether by deposit or bank transfer or other authorized means, must be made within fifteen (15) calendar days following the payment date of the respective salaries or wages.

RETENTION AND DEPOSIT OF QUOTAS. The amount of the monthly retention of individual quotas corresponding to each one of the teachers in the public or private education system shall be transferred or deposited by the Secretary of Finance or transferred by each private education entity or higher education entity incorporated, as appropriate, in the INPREMA banking accounts designated for that purpose; the time periods for these transfers or deposits shall be similar to those provided in the preceding article.

REMISSION OF MONTHLY PAYROLLS OR STATEMENTS. It is the responsibility of employers to submit to INPREMA the monthly payrolls or statements, stating the full name of each teacher, identity number, their salary, and the individualized amount of the respective contribution and quota, calculated or determined in accordance with what is provided in the Law and in this Regulation. This remission must be made when the deposit or transfer of the corresponding amounts is made, electronically and simultaneously, without prejudice to other means that INPREMA may authorize, in which case the period of three (3) business days provided for this purpose in Article 37 of the Law shall be observed. In case of non-compliance, employers shall be responsible for damages that may cause to the affiliates and to the Institute, for which INPREMA shall apply what is provided in Articles 38 and 39 of the INPREMA Law.

DEPOSIT OF CONTRIBUTIONS AND QUOTAS OF VOLUNTARY PARTICIPANTS. The individual quotas and employer contributions assumed by each voluntary participant, according to the coverage requested by them, shall be deposited monthly in the INPREMA banking account designated for such purpose, and may also be made effective by other means opportunely authorized; in such case, the voluntary participant must individualize the amount of the monthly contribution and quota and notify INPREMA within a period not exceeding three (3) business days from the payment made and through the mechanism established by INPREMA for such purposes.

VERIFICATION, RECONCILIATION AND REGISTRATION. INPREMA, through the Operations Department, shall verify the monthly transfers or deposits received, reconciling them with the payrolls submitted by the employers, proceeding to their registration, so that the employer contributions corresponding to each active participant and the respective individual quotas are recorded in its database, in addition to the contributions and quotas of voluntary participants.

INCONSISTENCIES OR SHORTFALLS. If as a result of the verification provided in the preceding article, inconsistencies or shortfalls are detected, INPREMA shall immediately proceed to file a claim with the employer, as appropriate, without prejudice to the reconciliation of amounts that may proceed, registering in any case the pending payments. CHAPTER III LATE PAYMENT SURCHARGES, ADJUSTMENTS AND PAYMENT AGREEMENTS

LATE PAYMENT SURCHARGE. Once the periods provided in Articles 19 and 20 of this Regulation expire, the failure to pay INPREMA the employer contributions and individual quotas generates the obligation to pay default interest, calculated at an effective rate of two percent (2%) monthly on the amounts owed to the Institute, as provided in Article 38 of the Law; this accessory obligation shall accrue as of the date on which the contributions and quotas that are in default were generated and shall be maintained until their payment is made. This payment obligation corresponds to the State, to private education entities or to higher education entities incorporated into the Institute that incur in default. The provisions of this article are also applicable to voluntary participants when they do not pay their individual quotas and contributions that correspond to them within fifteen (15) calendar days following the expiration of each month.

COLLECTION MECHANISMS. As soon as a default situation is detected, the Operations Department of INPREMA shall inform the Collections Department so that it immediately initiates the necessary steps to obtain payment of the sums owed, with their interests, whether by written notice, home visits, telephone calls or other viable mechanism, all of which shall be recorded in each file. Likewise, and in the case that the amounts owed correspond to insolvent educational institutions or those declared in bankruptcy, the collection efforts shall be directed to the persons who hold or held the legal representation of said educational institutions. If the collection efforts made do not have a favorable result and the accumulated default exceeds six (6) months, the Directory of Specialists through its President, within the following sixty (60) business days, shall proceed to notify or require in writing the debtor entity, and after the period of forty-five (45) business days has elapsed to proceed to the fulfillment of its obligation, including default interest, or, failing that, to sign a payment agreement with the Institute; within this same period the debtor may submit in writing the defenses that in their opinion are appropriate, and reconciliation hearings may be held to verify balances and determine, where appropriate, the actual amount of pending obligations. After the period of forty-five (45) business days has elapsed without payment having been made or without a payment agreement being signed with that purpose, INPREMA shall proceed through judicial means, with the certification indicated in Articles 110 of the Law and 31 of this Regulation serving as an enforceable title. These collection actions may be entrusted to legal professionals in the service of the Institute as permanent employees or through the hiring of external professionals or external collection companies, provided that such hiring does not contravene the provisions established in the General Budget of Income and Expenses of the Republic in force. The same procedure shall be applied when the debtor is a teacher affiliated voluntarily, and upon not receiving a positive response from them, it shall proceed according to what is established in the voluntary affiliation agreement signed between the parties.

PAYMENT AGREEMENTS. Private education entities or higher education entities incorporated into the System that incur in default may sign payment agreements with INPREMA, based on the adjustments formulated and the recognition of their debt, advancing a percentage as a premium on the total owed, according to the scale approved by the Directory of Specialists for this purpose, and for which it must establish the form, periodicity and deadline. Likewise, the education entity must assume the payment of the resulting balance in monthly installments, according to the deadline established, including the payment of default interest at the rate set by the Directory of Specialists. For the foregoing purposes, the debtor entity, through its legal representative, shall sign promissory notes for the amount of the debt with its interests or bills of exchange for the amount of the monthly installments established. INPREMA may also demand the granting of real or personal guarantees to ensure the fulfillment of pending obligations. The foregoing is understood without prejudice to the criminal or civil liability that debtors or their representatives may incur, and the directly affected teachers may also claim, in the case of civil liability, directly from the failure to pay the respective contributions and quotas, as appropriate. In the case of criminal liability, the matter shall be communicated to the Attorney General of the State.

REQUIREMENT OF SOLVENCY. For the approval of any benefit in favor of active or voluntary participants, it is an indispensable requirement that the payment of the respective contributions and quotas be current, as provided in the second paragraph of Article 47 of the Law. Nevertheless, when a participant having paid their quotas to the employer, the latter has not paid such quotas to INPREMA, the Institute may recognize the provision of services and payment of benefits, only when the debtor employer has honored such obligations or in its case has signed a payment agreement with INPREMA; however, if this latter situation occurs, the Institute shall recognize the obligation with the participants to the extent that the employer pays the installments established in the mentioned agreement.

SOCIAL SECURITY LIABILITY IN CASE OF DEFAULT. Notwithstanding what is provided in Article 47, second paragraph of the Law and in the preceding Article 28, if the employer in default signs a payment agreement with INPREMA, the latter, in accordance with what is indicated in Article 117 of the Law, shall process the benefit requests of the participants. This is understood without prejudice to administrative actions or judicial actions that may be necessary to recover the default, in the event of non-compliance by the debtor.

PAYMENT BY PARTICIPANTS. In the event of default by employers, participants may also personally assume payment of the contributions and quotas that are pending in order to comply with what is established in Article 47 of the INPREMA Law, without prejudice to the right of action for recovery they may exercise against employers and their report to the Public Ministry, if there were indications of criminal responsibility for fraud, misappropriation or other cause. Payment made by participants shall not represent any obligation of INPREMA to act on their behalf before employers to recover those amounts; in any case, if the employer amortizes the delinquent debt, the corresponding settlements shall be made, provided that no outstanding balances remain in favor of INPREMA. This option shall not be applicable to owners or co-owners of insolvent educational centers except upon acceptance of the debt by means of the signature of a payment agreement and cash payment of the contributions and quotas of the owner or co-owner.

EXECUTIVE TITLE. For the judicial collection of sums owed to INPREMA on account of contributions and quotas, in addition to bills of exchange or promissory notes that may have been executed by debtors, the certification issued by the Board of Specialists through its President, evidencing the sum owed and its interest, shall also constitute an executive title, as provided in Article 110 of the Law. CHAPTER IV CONSOLIDATION OF SALARIES FOR CONTRIBUTIONS AND QUOTAS

CONSOLIDATION OF SALARIES. If a participant holds two or more teaching positions in one or several educational centers, whether public or private, for each one of them the respective contributions and quotas shall be paid to INPREMA, understanding that the salary subject to contribution shall be the sum of the different remuneration in the proportion that corresponds. In these cases, each employer shall be a contributor and the teacher shall be a quotaholder for each of his employments. The determination of benefits shall be made on the basis of the contributions established and applying what is indicated in the

of this Regulation.

RETURN OF EXCESS PAYMENTS. In the case indicated in the preceding article, if the sum of the different salaries exceeds the maximum limit of the salary subject to contribution provided in Articles 3 numerals 25 and 26 of the Law and 3 literal t) of this Regulation, the excess contributions and quotas that shall have been paid shall be considered unduly paid, generating the obligation of their return to the employers and to the participant, as applicable, plus their interest calculated in accordance with the monthly average of passive interest rates in the national banking system. For the purposes provided in this article and in the preceding article, INPREMA, through the Operations Department, shall identify participants with more than one teaching position in order to make the necessary adjustments in the payrolls generated for the payment of the respective contributions and quotas, even if the sum of the different nominal salaries would give rise to the situation indicated in Article 10 literal a) of this Regulation, as appropriate, and shall notify all of this to the employers and to the interested participants. In any case, participants who find themselves in that same situation must notify INPREMA of the same for the corresponding purposes. CHAPTER V EMPLOYER RESPONSIBILITY

MANDATORY NOTIFICATION OF CHANGES IN TEACHER PAYROLLS. Employers are obligated to notify INPREMA, as soon as they occur, of changes in the payroll of their teaching employees, including hiring or admissions, terminations for any cause, promotions, salary modifications or other circumstances that alter or may alter the amount of contributions and quotas of each participant or their right to the benefits established in the Law. If by failure to notify the contributions and quotas are not paid to INPREMA in the correct amount, the employer shall be responsible for the outstanding balances, and must pay them with delinquency surcharge, either by paying immediately or by executing a payment agreement as provided in this Regulation.

SUSPENSION OF AUTHORIZATIONS AND PERMITS. In accordance with what is provided in the final paragraph of Article 111 of the Law, non-governmental educational institutions that have been subject to judicial proceedings and do not effect payment of the sums owed due to insolvency of such institutions, or for other reason, INPREMA, through the Presidency of the Board of Specialists, having obtained a judicial pronouncement or final judgment in its favor, shall proceed to notify the debtor's non-compliance to the Ministry of Education and to the Municipal Corporation of the jurisdiction where the educational establishment is located, so that they may proceed, respectively, to suspend the Authorization Agreements and municipal operating permits or other authorizations as of the beginning of the following school year, so that educational entities in default may not continue operating as long as they do not comply with their obligations to INPREMA, all of which must be fully documented. The foregoing is understood without prejudice to the criminal responsibility that debtors or their representatives may incur, or the civil liability that teachers directly affected by their employers' non-compliance may claim.

FAILURE TO COMPLY WITH PAYMENT AGREEMENTS. Non-compliance by the debtor entity with the payment agreements it may have executed with INPREMA shall give rise to judicial action for recovery of the obligations in default with their respective interest, without prejudice to prior collection proceedings by extrajudicial means that may be deemed appropriate. If applicable, the provisions of the preceding article shall also be applied. CHAPTER VI FINAL PROVISIONS

INFORMATION REQUIREMENTS AND INSPECTIONS. INPREMA may require of employers as referred to in the preceding Article 5 the provision of such information as may be necessary for the purposes provided in this Regulation, and they shall be obligated to provide it; it may likewise conduct inspections in educational entities to verify payrolls or schedules, interview teachers regarding the withholding of their quotas, verify proper payment of contributions and quotas and perform such other verifications as may be pertinent. Participants, public officials, non-governmental educational institutions or their legal representatives and their employees, when they are responsible for denying, omitting, falsifying, altering or delaying the information requested for purposes of processing or granting a benefit, shall incur in the sanctions established in Article 113 of the Law.

INTERNAL AUDIT. The Internal Audit Unit of INPREMA shall periodically verify the collection of contributions and quotas, verifying that they comply with the Law and with what is provided in this Regulation; it shall likewise examine the situations of default and the actions for their recovery, including, among others, the prior examination of the payment agreements to be executed, and shall verify their compliance or the actions that are appropriate in the event of non-compliance.

COLLECTIONS COMMITTEE. The actions of INPREMA for the collection of sums owed on account of contributions and quotas shall be coordinated by the Collections Committee, composed of a Specialist Director, who shall preside over it, and by the Heads or representatives of the Collections, Operations, and Legal Advisory Departments.

REPORTS. The Board of Specialists in ordinary sessions of the Assembly of Participants and Contributors shall report on the collection of contributions and quotas and other actions provided for in this Regulation; such reports shall be reviewed by the National Commission of Banks and Insurance in the corresponding minutes when it so requires, in accordance with what is established in Article 14 numeral 8) of the Law.

REPEAL. The "Special Regulation on Contributions and Quotas to INPREMA of Educational Establishments," approved by the Board of INPREMA on May 2, 1990 and published in the Official Journal "La Gaceta" on August 20, 1990, is hereby repealed.

EFFECTIVE DATE. This Regulation shall enter into force on the date of its publication in the Official Journal "La Gaceta". Done in the city of Tegucigalpa, on the 04th day of the month of December of two thousand twenty (2020). Lic. Héctor Wilfredo Díaz Romero Commissioner President