Military Pension Law

This Act regulates the Military Social Insurance regime of the Armed Forces, whose enforcement body is the Military Social Insurance Institute.

The Military Social Insurance Institute is an Agency of the Armed Forces, with Legal Personality, Functional Autonomy and its own Patrimony; for legal purposes it shall be domiciled in the capital city of the Republic.

Military Social Insurance is understood to be the special Social Security regime for the Armed Forces.

The benefits of the Military Social Insurance regime are divided into benefits and services.

Benefits are considered to be the monetary benefits paid by the Military Social Insurance Institute to its affiliates or, as the case may be, to the beneficiaries thereof who are duly registered or who can conclusively prove their condition as such. The Military Social Insurance Institute shall provide the following benefits:

• a)

  Disability;

• b)

  Separation;

• c)

  Retirement;

• d)

  Funeral Assistance;

• e)

  Insurance;

• f)

  Survivor's Pension, and;

• g)

  Others that, at the discretion of the Board of Directors and subject to actuarial study, may be provided.

Services are considered to be the non-remunerated benefits provided by the Military Social Insurance Institute or its agencies to its Affiliates or, as the case may be, to the beneficiaries thereof who meet the same requirements demanded in the preceding article. The destination, use and enjoyment of existing services, as well as those to be organized in the future, shall be regulated by the Board of Directors.

The Military Social Insurance regime shall be implemented gradually and progressively, both with respect to benefits and services, as well as to other categories of members of the Armed Forces.

The following are affiliates and consequently are subject to the Military Social Insurance regime:

• a)

  Officers, Enlisted Personnel and Auxiliaries who contribute to the Military Social Insurance regime;

• b)

  Officers of the branches and services who, by agreement of the Chief of the Armed Forces, take on positions in the Public Administration.

The minimum age for admission to the Military Social Insurance regime is thirty (30) years, except as provided in Article 83.

The affiliates to the Institute may not be subject to any other state social security regime, nor shall deductions be made for analogous entities.

Officers, Enlisted Personnel and Auxiliaries in whose favor another state social security regime has granted pensions or retirement benefits may not affiliate with the Military Social Insurance Institute.

When the affiliate is not united by marital bond, the domestic partner who meets the legal requirements and those established in the respective regulations shall enjoy all the rights granted by this Act.

The administrative bodies of the Military Social Insurance Institute are:

• a)

  The Board of Directors;

• b)

  The General Management.

The Board of Directors is the superior collegial body of the Military Social Insurance Institute and to it corresponds the direction, guidance and determination of its policy.

The Board of Directors is composed of the Chief of the Armed Forces, the Chief of the General Staff, the Secretary of State in the offices of National Defense and Public Security, the General Commanders of the Branches: Army, Air Force, Navy and Public Security, or their legal substitutes. It is also composed of one proprietary representative and one alternate of the retirees, who shall be appointed by the Board of Directors at the proposal of the General Management.

The President of the Board of Directors shall be the Chief of the Armed Forces and in the temporary absence thereof, the Chief of the General Staff shall assume his functions.

The representative of retirees in accordance with the present Law shall be an Officer in inactive status and in retirement condition and shall serve in his functions for one year, renewable.

The Board of Directors shall have the following powers:

• a)

  To comply with and enforce the present Law and its Regulations, issuing the necessary provisions for the efficient achievement of the Institute's purposes and for its better functioning and development;

• b)

  To approve Internal Regulations;

• c)

  To approve the annual budget;

• d)

  To review Reports, Financial Statements and other studies;

• e)

  To hold legal representation, being able to delegate it to the Manager;

• f)

  To propose to the Chief of the Armed Forces the appointment and removal of the Manager and Sub-Manager;

• g)

  To order actuarial reviews of the system to be conducted when deemed convenient;

• h)

  To authorize all types of operations or activities of a financial, commercial, industrial or any other nature that result in benefit to the Institution; and i) Such other powers as correspond to it in accordance with this Law and its Regulations.

The Board of Directors shall meet in ordinary session once a month and in extraordinary session whenever there are urgent matters to be addressed. Sessions shall be convened by the President through the Manager and by his own initiative, at the request of the Manager, or upon written petition of three (3) of the member directors. Each convocation shall specify the matters to be addressed.

The quorum for ordinary and extraordinary sessions shall be six (6) members, in which case resolutions shall be adopted by unanimous vote.

The President shall direct the sessions of the Board and shall decide by casting vote any ties that arise.

Regardless of the reason for which a person has ceased to be a member of the Board of Directors, he shall remain subject to the liabilities in which he may have incurred during his tenure.

The Management is the executive body of the Institute and shall be in charge of a Manager, assisted by a Sub-Manager. To be Manager and Sub-Manager, one must be a Senior Officer in permanent status, Honduran by birth, and of recognized capacity in economic and social matters.

The administrators of the services, Department Chiefs and other administrative personnel shall be appointed by the Chief of the Armed Forces, the Board of Directors, as the case may be, upon proposal of the Manager and shall be subject to what the respective Regulations establish.

The Manager shall exercise the legal representation of the Institute by delegation of the Board of Directors, shall be directly responsible for its functioning, shall act as Secretary of the Board of Directors and shall have the following functions:

• a)

  To ensure compliance with this Law and its Regulations, to comply with and enforce the resolutions and agreements of the Board of Directors;

• b)

  To direct, coordinate and control the general functions of the Institute;

• c)

  To present to the Board of Directors, at least three (3) months before the end of each fiscal year, the budget proposal of the Institute for the following year;

• d)

  To execute or authorize contracts, investments and expenditures within the limits set by the Board of Directors;

• e)

  To present to the Board of Directors, within the first two (2) months of each fiscal year, a report of the work carried out during the previous year;

• f)

  To obtain and present to the Board of Directors any information, data or studies that it may require;

• g)

  To prepare and present to the Board of Directors the draft Regulations;

• h)

  To attend all sessions of the Board of Directors with voice but without vote; and i) Such other functions as the Board of Directors and the Institute Regulations may assign to him.

The Manager, Sub-Manager and Administrators may be removed in the cases where removal is warranted in accordance with the laws in force.

The Sub-Manager shall perform the functions assigned to him by the Manager, and must substitute for him in case of absence or temporary impediment.

The Manager shall be assisted by the Administrators of the different Services.

Incorporation into the Military Social Security regime shall be mandatory for members of the Armed Forces who, in accordance with the Law, must be protected under such regime.

The contributions of those affiliated to the Military Social Security regime shall be made on the basis of the insured salary.

For the purposes of this Law, guaranteed and contributory salary for affiliates is that assigned in accordance with the Salary Table of the hierarchical scale approved by the Commander-in-Chief of the Armed Forces.

The Military Pension Institute shall have priority over any other creditor for the sums owed by affiliates, retirees, or their beneficiaries.

Notwithstanding what is established in the preceding article, any transfer, cession, or encumbrance of the benefits of disability, separation, retirement, death assistance, life insurance, and pension annuity established in this Law shall be null and void and may only be subject to garnishment to enforce the obligation of alimony, in accordance with what is established in the Civil Code.

For the purposes of this Law, Disability is understood to mean the permanent incapacity of an affiliate of the Institute, produced by any illness or injury, physical or mental, that prevents him from continuing to perform his usual duties.

The amount of the Disability pension shall be:

• a)

  One hundred percent (100%) of the guaranteed salary, when the incapacity arises from actions in combat;

• b)

  Ninety percent (90%) of the guaranteed salary, if the incapacity arises from illness or from acts of service;

• c)

  Eighty percent (80%) of the guaranteed salary, if the incapacity arises from circumstances other than those mentioned above.

The causes of Disability, as well as their consequences and other aspects related to it, must be proven before the Commander-in-Chief of the Armed Forces, who shall conduct the corresponding investigations by means of the General Staff and the Military Pension Institute.

SEPARATION is understood as the benefit to which affiliates of the Military Pension Institute are entitled, when by order of the Commander-in-Chief of the Armed Forces they are separated from said Force and provided they have contributed to the system for a minimum of FIVE (5) years, but less than EIGHTEEN (18) years.

The separation benefit shall be paid at the rate of one monthly payment per year of service rendered, not exceeding seventeen (17) monthly payments.

The affiliate who receives the benefit for separation shall lose his affiliate status. If he returns to serve in the Armed Forces, the Institute shall take him on as a new affiliate.

Retirement is understood as the benefit to which affiliates of the Military Pension Institute are entitled, when by order of the Commander-in-Chief they are placed in retirement status for having reached the age and service time limits established by the Constitutional Law and other laws of the Armed Forces, or for having contributed to the system for at least EIGHTEEN (18) years.

The Retirement benefit shall be granted in the following manner: At eighteen (18) years of service, fifty-four percent (54%) of the guaranteed salary, increasing by three percent (3%) for each additional year beyond this term, not exceeding ninety percent (90%), equivalent to thirty (30) or more years of computable service. These percentages may be increased by the Board of Directors, in accordance with new actuarial calculations, without exceeding one hundred percent (100%).

Death Assistance is the benefit intended to cover the cost of funeral services for the affiliate, the disabled person, and the retiree, in accordance with the following articles:

The persons who have incurred expenses for funeral services of the affiliate shall receive, in the proportion in which they participated, an amount in accordance with the scale set in the respective Regulation. Whoever has incurred expenses for funeral services of a person covered under the Disability or Retirement benefit shall have the right to receive the same percentages established in the Regulation referred to in the preceding article.

Life Insurance is understood as the benefit to which are entitled:

• a)

  The beneficiaries designated by the affiliate upon his death, and;

• b)

  The affiliates, when declared disabled or placed in Retirement status. For the purposes of this benefit, beneficiary shall be understood to mean the Wife or Husband, the domestic partner or companion, the children, legitimate, natural, or adoptive parents, and siblings, without distinction of age. Upon the death of any affiliate, the Institute shall pay to the designated beneficiaries in the respective document an amount equal to 12 times the guaranteed salary.

The affiliate shall have, at all times, the right to change his beneficiaries, either by inter vivos act or by reason of death.

If the affiliated member has not made a designation of beneficiaries, they shall be entitled to receive the indemnity; the widow or common-law partner or widower or common-law partner, the children, the legitimate, natural, or adoptive parents duly registered, in which case the insurance shall be distributed proportionally.

When an affiliated member avails themselves of the benefit of Retirement, they shall receive a sum of money in the form of insurance, equivalent to forty percent (40%) of the last insured salary for the first eighteen (18) years of service, plus five percent (5%) of said amount for each additional year, without exceeding one hundred percent (100%) for those who have thirty (30) or more years of service.

When an affiliated member becomes disabled as a result of action in Combat or on the occasion of service, and has completed eighteen (18) or more years of service, they shall be entitled to

the benefit of insurance, in the same proportion established in the previous article.

When the death of the Retiree or the Disabled person occurs, the designated beneficiaries shall receive the equivalent of fifty percent (50%) of the annual insured salary at the time of retirement from service or being declared disabled. SECTION VI SURVIVORS' PENSION

It is the benefit to which the following persons are entitled, in order:

• a)

  The widow or widower, provided that at the time of the affiliated member's death the spouses are not legally separated;

• b)

  In the absence of a spouse, the common-law partner who is duly registered with the Institute;

• c)

  Children under 21 years of age;

• d)

  Disabled children;

• e)

  Children over 21 years of age and under 24 who are pursuing higher education, and;

• f)

  Legitimate, natural, or adoptive parents duly registered, provided that they have been economically dependent on the affiliated member and lack other means of subsistence in the proportion established by Article 59.

To the beneficiaries of affiliated members who die in combat, the benefit for Survivors' Pension shall be granted in the amount of ninety percent (90%) of the insured salary.

To the beneficiaries of affiliated members who die by cause or on the occasion of service, the benefit for Survivors' Pension shall be eighty-five percent (85%) of the insured salary.

For the beneficiaries of affiliated members deceased under circumstances other than those contemplated in the two preceding articles, the benefit for Survivors' Pension shall be eighty percent (80%) of the insured salary.

In case of death of affiliated members availing themselves of the benefits of Disability and Retirement, their beneficiaries shall enjoy the right to Survivors' Pension in an amount equivalent to eighty percent (80%) of the benefit that the deceased was enjoying.

When there is concurrence of widow or common-law partner or widower or common-law partner with minor children or disabled adult children of the affiliated member, the pension shall be divided in fifty percent (50%) for the widow or common-law partner or widower or common-law partner and the remaining fifty percent (50%) shall be distributed proportionally among the children duly registered with the Institute by the affiliated member.

When the widow or widower or common-law partner contracts marriage or enters into common-law union or dies, the corresponding benefit shall accrue proportionally to that of the children.

When any of the children reaches the age of majority, contracts marriage, enters into common-law union or dies, the corresponding benefit shall accrue proportionally to the others, once twenty-five percent (25%) has been separated, a percentage that shall increase the pension of the widow or common-law partner or widower or common-law partner.

In the event that there is no widow or widower, common-law partner, or children, the pension shall be granted to the mother or father who has been economically dependent on the deceased; in which case the pension shall be equal to fifty percent (50%) of the pension to which the spouse or common-law partner would be entitled and fifty percent (50%) assigned to minor children under 21 years of age or disabled adult children. CHAPTER V EXTINCTION AND SUSPENSION OF BENEFITS

The pension is extinguished:

• a)

  By the death of the beneficiaries;

• b)

  When at the date of death of the affiliated member, retiree or disabled person, there is manifest abandonment by their beneficiaries;

• c)

  When by judgment the widow or widower, common-law partner, children or parents are declared to be authors or accomplices of the death of the affiliated member, retiree or disabled person;

• d)

  When the widow or widower or common-law partner contracts marriage or enters into common-law union;

• e)

  When at the death of the single affiliated member or disabled person without children, it is proven that the father or mother abandoned them in their minority;

• f)

  When the minor beneficiary contracts marriage, enters into common-law union, or reaches 21 years of age;

• g)

  When the beneficiary over 21 years of age and under 24 who is pursuing higher education contracts marriage, enters into common-law union, or is employed, and;

• h)

  When the Retiree, Disabled person or their beneficiaries opt for citizenship of another State, unless between this State and Honduras there exist treaties that permit dual nationality, or when they reside continuously abroad for more than two (2) years without authorization from the Board of Directors.

The right or pension for retirement or disability is suspended when the beneficiary is holding a paid public office or employment or providing services in a decentralized institution of the State and in other cases as determined by the regulations.

Officers who have not paid their contributions and obligations to the Military Pension Institute for more than three (3) months shall be temporarily suspended from the enjoyment of their rights until they are current with the Institution. CHAPTER VI FINANCIAL REGIME AND INVESTMENTS

The resources of the Military Pension Institute are: a) The contribution established by the Executive Power, which shall be paid in the following proportion: 1) Two thirds (2/3) by the State, and 2) One third (1/3) by the affiliates. b) The funds that the State contributes to cover the actuarial deficit, in accordance with

of the Law; c) The transfers, inheritances, bequests and donations that are accepted by the Institute; d) The profits obtained from its dependencies, as well as the surpluses of its budget; e) The returns, interest and profits obtained from investments made in financial, commercial, industrial or other institutions; f) The funds that the State grants to the Institute for its operating expenses; g) Any other securities, property or resources that are assigned to the Institute or that it acquires in any manner.

To meet the benefits established in Chapter IV, the Institute shall constitute the corresponding reserves annually.

In case of war or national emergency, the State shall ensure the economic solvency of the Institute.

The actuarial deficit and the contributions of the State resulting from the application of the Military Pension regime shall be included in the budget of the Department of National Defense and Public Security, being made available to the Institute by advance quarterly installments.

The amount of monthly contributions and payments of outstanding accounts with the Institute that affiliates must pay shall be deducted each month ex officio by the Payroll of the Armed Forces, immediately placing them at the disposal of the Institute. The General Treasury of the Republic or any other special Payroll shall proceed in the same manner with the contributions or payments that affiliates included in Article 8, subsection b must make.

The funds of the Institute shall be invested under maximum conditions of security and yield, and may be applied to financial, commercial, industrial or any other operations or activities that tend to increase them, redound in its benefit and contribute to achieving its purposes. CHAPTER VII AUDIT

The Military Pension Institute shall have an Internal Audit Department, which shall have the dual function of Advisory Organ of the Management and Control Organ dependent on the Board of Directors.

As an Advisory Organ, the Internal Audit shall report directly and exclusively to the Management and shall have the functions attributed to it by the Law and the Regulations.

As a Control Organ, the Internal Audit shall be dependent on the Board of Directors and shall be responsible for overseeing the operations of the Institute, both with regard to the benefits and existing services or those that may be organized in the future.

The Internal Audit Department shall be headed by an Auditor, who shall be appointed by the Chief of the Armed Forces at the proposal of the Board of Directors.

To be an Internal Auditor, the following are required:

• a)

  To be Honduran by birth;

• b)

  To be of legal age;

• c)

  To have a minimum of five (5) years of experience;

• d)

  To be of recognized honorability; and e. To have a degree as a Licensed Auditor and Public Accountant.

The procedure for the exercise of the powers granted to the Internal Audit Department shall be subject to regulation. CHAPTER VIII SPECIAL, TRANSITIONAL AND FINAL PROVISIONS

Retirees in accordance with the provisions of this Law, who are called again to render their services in the Armed Forces, shall have their prior service time taken into account to increase the benefit that corresponds to them according to the case at the end of their new period of service.

The benefits for Disability, Retirement, and Survivor's Insurance shall be paid in monthly installments as they become due. The benefits for separation, funeral aid, and insurance shall be paid in a single payment.

Both the Retirement situation and Separation shall be authorized by means of an agreement of the Head of the Armed Forces. The declaration of Disability shall be made in accordance with the provisions established in the

The granting of benefits to beneficiaries is an attribution of the Institute by means of a resolution of the Board of Directors.

The Military Social Security Institute and its dependencies shall be exempt from taxes and other fiscal, municipal, and district levies and shall enjoy postal and telegraph franking privileges.

For the purposes of this Law, adoption shall be understood to mean both legal adoption and de facto adoption.

The Manager, the Sub-Manager, the Administrators of the services, the Head of the Cash Department, and other officials of the Military Social Security Institute who handle funds are obligated, before taking possession of their positions, to furnish the bond required by law before the Board of Directors.

The debt certificates issued by the Institute with respect to its affiliates and the credit documents signed by them in favor of the same have the character of an executory title.

The benefits already granted in accordance with the Military Ordinance, other Military Laws and Regulations shall remain in effect within their special regime.

The Military Social Security Institute recognizes to the Officers in permanent status the service time they have accumulated as such when the Organic Law issued by Decree Law number 88, dated October 19, 1973, came into effect. For Auxiliary Personnel and Enlisted Troops, the service time is equal to that of contribution.

The Military Social Security Institute shall administer the funds for the payment of the benefits and benefits granted in accordance with the Military Ordinance, other Military Laws and Regulations.

When an affiliate may be eligible for one or more benefits, the one providing the greater benefit shall be assigned to them.

The minimum and maximum amounts on which the auxiliary personnel shall contribute shall be fixed by the Board of Directors.

Any affiliate to the Military Social Security Institute who has contributed for less than five (5) years, if they withdraw from the system, shall receive the amount of the contributions they have made; and must previously present the respective cancellation document.

In the case contemplated in subsection e) of Article 60, the pension shall be granted, after prior socio-economic study, to the person who has exercised parental authority or to the one who has provided for their support, upbringing, and education, even if there is no family relationship whatsoever.

This Law shall be regulated by the Executive Branch through an agreement issued through the State Secretariat of the Offices of National Defense and Public Security.

This Law shall enter into force as of this date and must be published in the Official Gazette "La Gaceta", thereby repealing the Law issued by Decree number 88 of October 19, 1973. Given in the city of Tegucigalpa, Central District, in the Government Building, on the twenty-seventh day of the month of March of one thousand nine hundred eighty. Published in the Official Gazette La Gaceta number 23089 dated April 29, 1980.