The COVID-19, which is widely believed to have started afflicting and killing its human victims in China, has gradually and steadily spread to virtually every continent on earth.
More than 4,000 people have died from it, some of them pensioners who contracted the virus while on holiday or during socialising in crowded spots to cure loneliness.
With around 115,000 confirmed cases and about 65,000 recoveries worldwide, the virus is devastatingly berthing in more countries around the time of writing this item. No one on earth can predict the total devastation it can cause around the world.
In addition to its human death toll, the global panic it caused, COVID-19 has devastating consequences on the lives of pensioners in the world.
COVID-19 has shifted the attention of many governments and health service providers from old age sicknesses to victims of COVID-19. This neglect of sick pensioners can lead to the death of more of them from both the virus and their non-COVID-19 illnesses.
Thus, the normal comfort and care hitherto directed at pensioners suffering from geriatric illnesses may be seen as non-priority by devoting more personnel and resources to those afflicted by COVID-19.
It is possible that researchers in medical sciences working on geriatrics medicine may be diverted to contribute in finding cure and vaccine for the novel virus.
And given the reported worldwide plunge in productive economic activities caused by COVID-19, there will likely be less revenue for governments and businesses to pay Defined Benefit pensioners, or pay the prescribed contributions to Retirement Savings Accounts. This can have real unpleasant consequences on the wellbeing of retirees.
The rapid fall in the value of stocks on the most influential stock markets in the world could have at least two effects on the wellbeing of millions of pensioners. Those of them with large personal or direct holdings in the now less-valuable stocks will lose money. And if part of the money in their managed retirement savings was invested in stocks that shed value due to COVID-19, that represents double loss for such pensioners.
The muted economic activities induced by COVID-19 will eliminate borrowings from Pension Funds to meet short-term recurrent financial needs by industry. This will in turn reduce potential income for pension funds, and the consequential income to Retirement Savings Account.
The Investments & Pensions Europe (IPE International) said on its website that, “The exact impact per pension fund depends on schemes’ investment mix and the degree to which they have hedged the interest risk on their liabilities.”
In Nigeria, President Muhammadu Buhari has commendably set up a crack team to review the 2020 budget of over N10 trillion. This is simply because at the time of writing this item, the price of crude oil is hovering around US$30 per barrel, whereas the budget was based on oil prices at US$57.
The slowed demand for oil due to COVID-19 and the glut in supply triggered by price, supply and national ego warfare between Saudi Arabia and Russia, have sadly combined to have serious negative implications on the economic fortune of our country.
The possible implication of a reviewed budget, lower oil revenue and cut in Government spending may lead to delays in paying pensioners under the Pension Transitional Arrangement Directorate (PTAD), and a probable ballooning of the N494.12 billion admitted by the National Pension Commission (PenCom) as Federal Government’s total arrears of pension liabilities at the end of 2019.
As the economy slows, the private sector too may encounter reduced ability to promptly remit the employer contribution to the Retirement Savings Accounts of their employees. But I pray it does not lead to staff shedding.
More prayer: may the Almighty God end COVID-19, the disarray in the Oil Producing and Exporting Countries, the war of ego between Russia and Saudi Arabia and their painful effects on pensioners.