The National Pension Commission (PenCom), on Wednesday, 14 February 2018, issued two-pronged notices to both employers and employees on the administration of life insurance policy. The public notices are meant to serve as a reminder to the earlier issued guidelines for life insurance policy by PenCom.
The first notice (Notice 1), issued pursuant to the provisions of Section 4(5) of the Pension Reform Act, 2014, is addressed to all employers of labour and seeks to ensure compliance with PenCom’s guidelines for life insurance policy. Highlights of this notice include;
- Submission of the life insurance certificates (the Certificates): Employers are mandated to submit copies of the Certificate, with the schedule of beneficiaries to PenCom no later than 31 March 2018
- Content of the Certificates: The Certificates should state that the employees are covered up to an amount not less than 3 times of their annual total emoluments
The second notice (Notice 2) seeks to use employees to check employers’ compliance by intimating all employees of their rights to life insurance policy and pension contributions. It specifically urged employees to:
- insist on their employers taking out life insurance policy on their behalf, for an insured amount of not less than three (3) times their annual total emoluments
- ensure that all pension contributions deducted from salaries or contributed to by employers are remitted to the respective Pension Fund Custodian by the employer not later than seven (7) days from the day salary was paid
- report any irregularities to PenCom in respect of any failure on the part of the employer to procure the minimum required life insurance policy, submit evidence of compliance and remit deducted pension contributions.
While these notices are a good development in ensuring the welfare of labour in Nigeria, it would be interesting to see how things will play out with respect to implementation. A scenario that is expected to play out is one in which an employee, in current employment, reports his/her employer to PenCom. Is there a safety net for such employee?
It is therefore expedient for PenCom to come up with monitoring strategies to appropriately see to the compliance of employers to their obligations with respect to life insurance policy.
Nigeria’s naira gains against the dollar, as CBN closes in on currency speculators
This is naira’s first major gain against the dollar since late March.
The Nigerian currency (the naira) gained against the dollar on Monday by selling at N441 to a dollar at the parallel market.
Note that the N441 exchange rate is stronger than N450 to a $1 that was posted on Friday May 29, 2020.
Meanwhile, this is naira’s first major gain against the dollar since late March. The development follows concerted efforts by the apex bank to disrupt the activities of currency speculators.
Just recently, the CBN Governor, Godwin Emefiele, issued a stern warning to currency speculators and hoarders. He also advised Nigerians to desist from patronizing black-market currency operators. According to him, the rates they are buying the dollar from the black market are unrealistic. Therefore, there is high probability they will lose their money if they continue to do so.
Recall that the CBN recently re-started the weekly dollar sales of $100 million for small businesses and individuals who are in genuine need of Foreign exchange. Reacting to this, the Team Lead at CardinalStone Research, Philip Anegbe, had told Nairametrics that the pressure on the naira is expected to ease soon.
“I believe some of the recent pressures on FX is driven by speculators’ panic responses to weakness in dollar earnings, the decline in FX inflow through the I and E window, and suspension of dollar sales to BDCs.
“The imminent resumption of BDC activities is therefore likely to slightly ease naira pressures in the parallel markets, but we believe the underlying medium-term fundamental concerns facing the naira still remain,” he said.
REMINDER: FGN Ijara Sukuk Bond auction closes on 2nd June 2020
Proceeds from the Ijara Sukuk Bond auction will be used solely for the construction and rehabilitation of key roads across the six geopolitical zones of the country.
The Debt Management Office (DMO), on behalf of the Federal Government, has reminded the general public that the offer for subscription to the N150 billion FGN Ijara Sukuk Bond will close on Tuesday June 2nd, 2020.
The offer for subscription was announced some days ago by the DMO, as Nairametrics reported. Below are the details of the offering.
The Auction: N150, 000,000,000 – Rental Rate of 11.20% per annum IJORA SUKUK FGN JUNE 2027 (7-Yr Opening)
Arranger: FBNQuest Mechant Bank Limited and Lotus Financial Services Limited.
Opening Date: May 21, 2020
Closing Date: June 2, 2020
Settlement Date: June 9, 2020
Summary of the Offer
Instrument Type: Ijarah (Lease) Sukuk
Issuer: FGN Roads Sukuk Company 1 Plc. on behalf of the Federal Government of Nigeria.
Units of Sale: N1,000 per unit subject to a minimum Subscription of N10,000 and in multiples of N1,000 thereafter.
Rental Payment: Payable Half Yearly.
Redemption: Bullet repayment on the date of maturity
Use of Proceeds: Proceeds will be used solely for the construction and rehabilitation of key roads across the six geopolitical zones of the country.
About Sukuk bonds
Sukuk is derived from the word Sakk, which can be translated to mean legal instrument, deed, and cheque. Sakk can also mean to strike a deal on a paper document.
The origin of Sukuk dates to 7th century AD, where the first Sukuk transaction took place in Damascus, Syria in the Great Mosque of Damascus (Umayyad Mosque).
Since Islam prohibits usury – collecting interest from your loans – interest-based bonds are banned in Muslim nations.
Difference between Sukuk and regular bonds
Sukuk indicates ownership of an asset. The assets that back Sukuk are compliant with Shariah. In other words, such assets adhere to the Islamic prohibitions on gambling, alcohol, tobacco, narcotics, and adult entertainment products and services.
Sukuk notes pay a fixed percentage return as a profit-sharing percentage of the underlying assets’ revenues.
Regular bonds, on the other hand, pay a fixed rate of return as interest (coupon) semi-annually or annually.
Just In: PPPRA reduces petrol price to N121.50 per litre
“After a review of prevailing market fundamentals in the month of May and considering marketers realistic operating costs as much as practicable, we wish to advise of a new PMS guiding pump price…”
The Petroleum Products Pricing Regulatory Agency (PPPRA) has announced a new retail price band for oil marketers.
In a circular dated May 31st, as seen by Nairametrics, the downstream regulator said oil marketers are now expected to sell petrol within the price range of N121.50 and N123.50. Part of the circular said:
“Please recall the recently approved pricing regime which became effective March 19, 2020, and the provision for the establishment of a monthly price band within which petroleum marketers are expected to sell PMS at the retail stations.
“After a review of prevailing market fundamentals in the month of May and considering marketers realistic operating costs as much as practicable, we wish to advise of a new PMS guiding pump price with the corresponding ex-depot price for the month of June 2020, as follows; price band N121.50 – N123.50 per liter.”