Chuks Udo OKonta
The National Pension Commission (PenCom)
has disallowed licensed pension operators from using contract staff for
critical functions in their operations.
The Commission in a circular signed by
its Head, Surveillance Department, Mohammad Datti, identified the functions as,
pension administration; benefit administration; fund management and accounting;
settlement; safe keeping; contribution collection and administration and
information and communication technology.
The commission said it has observed an
increase, by the operators in the use of outsourced staff from third parties to
perform critical functions in pension administration and management as well as
custodian services, adding that these staff are often not properly trained and
their conditions of service poor.
It said the risks inherent in this
arrangement had already started manifesting, as there are several cases of
fraudulent activities involving these outsourced staff.
"It would be recalled that, when
the pension reform was conceptualised, only function that was allowed to be
outsourced was sales and marketing to be performed by sales agents.
"While the commission recognises
the fact that every business venture should strive for efficiency and be
mindful of overhead expenses, the commission will not allow the situation to be
to the detriment of the pension system and services to be delivered to
contributors," PenCom said.
PenCom said the operators are at liberty
to engage outsourced staff for sales and marketing functions only.
The
commission gave all licensed operators that have in their employment
outsourced/contract staff in the affected functions, transition period of six
months, effective from August 20, when the circular was issued, to convert
their employment to permanent status or replace them with permanent staff.
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