National Pension Commission (PenCom), has advised all Licensed Pension Fund Operators (LPFOs) not to lay off their staff because of the Coronavirus pandemic. Pension Fund Operators includes Pension Fund Administrators (PFAs), Pension Fund Custodians (PFCs) and Closed Pension Fund Administrators (CPFAs).
This advice was contained in a letter sent to all Licensed Pension Fund Operators in May 2020, with reference number PenCom/INSP/Surv/2020/515. The letter was titled, “Effects of COVID-19 on the Pension Industry,” and was signed by Ehimeme Ohioma, Head, Surveillance Department of PenCom.
Below are extracts from the letter.
“The Covid-19 pandemic has thrown up opportunities and threats to the values and processes of organizations in all sectors of the economy, including the pension industry. Thus, it is expected that Licensed Pension Fund Operators (LPFOs), like other corporate entities in the financial sector, are currently reviewing business strategies to limit the impact of Covid-19 on their effectiveness, efficiency and profitability.
“However, in fine-tuning strategies, the Commission strongly advises that you be mindful of social landmines that could have higher potential impact on the pension industry as a whole.
“Accordingly, the Commission wishes to crave the understanding of LPFOs not to carry out any form of staff rightsizing or rationalization during the period of this pandemic, except for reasons of fraud, forgeries and other unethical conduct.
“Taking such action, may bring the pension industry into collision with the labor unions. The pension industry must be seen to promote the protection of employees as well as help to create and retain jobs, for therein lies the sustainability of the Contributory Pension Scheme (CPS).”