PREPARED BY: UDONSI PATIENCE UMA

SUBMITTED: 3RD MARCH, 2021

ASSIGNMENT FROM GM, SERVICES (NPFL): RBA TRAINING (DECEMBER

2019)
1a. How can we curb the growing pension liability?

i. NNPC should consider the reduction in the rate of staff disengagement from service, which
culminates in rapidly increasing pension liability. However, where she chooses to sack in bulk,
NPFL should compute the liabilities up to when they were supposed to retire and bill NNPC
accordingly.
ii. Realistic pension salaries should be proposed and implemented, which will not be less than 1/3
of the last salary received whilst in service.

1b. What can we do to ensure continued pension payment to the retirees?

i. Closely monitor PFAs’ handling of our finances to ensure value for money and increased
income, pending when it is transferred to NPFL
ii. Engage in more aggressive, bust safe investment options. The fixed income market is
currently on a downward trend. A lot of Abuja residents want to own a house, but for the
cost of living. NPFL Management may wish to consider low-cost housing estates, which will
ensure sales turnover, or if held for investments, income turnover, since it would be
affordable.
iii. Invest in Euro bonds.
iv. Fit for purpose staff trainings and development.
2. Proffer ideas for NPFL to be self-sustaining and sustainability of the DB Scheme.

i. All of 1a and 1b above.

ii. Less bureaucracy in decision-making (with effective Lean Management, this can be achieved).
iii. Knowledge sharing (mentoring & coaching sessions)
iv. Imbibe succession planning as a corporate objective.
v. Diversification of investment options (divest from fixed securities to Low cost housing estates
that can be sold quickly over time).
vi. Demand more remittances from NNPC, as the Fund sponsors, to meet pension obligations
(from Audit records, NNPC remittance has dropped from N3.8bn in August to N1.2bn in
December 2020)
vii. Decentralisation of decision-making processes.
viii. Better communication of Management objectives & employee buy in.
ix. Create a policy that allows NNPC staff to choose whether to remain in the pension scheme or
not for sustainability; and when NNPC is considering bulk pension payment, the present value
(PV) of the bulk pension should be considered).
x. Establish sinking fund account and remit the future value of terminal benefits accrued or
accruing and as advised by the Actuary.
xi. Reduction in the frequency of changes in Management (i.e. Management staff turnover).

3. Are there new investment opportunities you believe NPFL needs to take advantage of?
i. Euro bond.
ii. Veritable real estate investments (low-cost houses).
4. Design a structure to fit into NPFL’s new role as a licensed PFA.

MD

CSLA
Audit/ RM

Risk Management
officer
Compliance officer

Director
Director Services
Investments
5. Give ideas on how to extract value from the real estate/property portfolio?
i. Sell off all estates that we incur more expenses than revenue.
ii. Charge realistic rent in line with economic realities.
iii. Stop the purchase of overpriced properties.
iv. Reduce the excess intermediaries (agents and co.)
v. Ensure that all investment decisions go through the Risk Management Committee.

6. Suggest strategies that can be adopted to reduce cost and increase income.
i. Full and immediate implementation of Lean Management (to eliminate/ manage the wastes).
ii. Personnel reorientation to align with current trends and economic realities, geared towards
cost reduction and revenue optimization.

7. What should NPFL be doing & what should it stop doing to be a top player/PFA in the pension
industry?
i. Reduction in the frequency of changes in Management.
ii. Knowledge sharing (mentoring & coaching sessions)
iii. Imbibe succession planning as a corporate objective.
iv. Better communication of Management objectives & employee buy in.