Lífeyrissjóður verzlunarmanna - Ársskýrsla 2020

Ársskýrsla Lífeyrissjóðs verzlunarmanna / Annual Report 2020 organisations to consult with each other to ensure that the fund’s Board of Directors as a whole possesses suf- ficient expertise and experience to fulfil its role. The nominations of those parties who nominate directors are confirmed by representatives of the respective member organisations in the funds’s Council of Representatives, which has a total of 50 members, cf. further provisions of Articles 5.4 to 5.7 of the funds’s Articles of Association. Composition of the management team According to law, the Articles of Association of the fund and its organisational chart, the managing director handles the fund’s day-to-day operations of the fund as provided for by law, the fund’s Articles of Association and the policies and instructions of the fund’s Board of Directors. The Articles of Association state that the managing director shall engage fund employees. The fund’s management consists of its managing director, seven heads of divisions and five department heads. Emphasis is placed on appropriate educational qualifications, experience and skills, equality and a reasonably diverse background to encourage desirable diversity. Information on the composition of management can be found in the fund’s Sustainability Report. The fund has not adopted a formal policy on diversity concerning its Board and management. This will be examined in the coming year in line with the development of legal requirements and the emphases in the guidelines on governance. In practice, however, this is currently based on the fund’s general human resources policy. The human resources policy states, among other things, that the pension fund strives to appoint qualified and com- mitted employees who take responsibility and show initiative in their work and who work as a unified team in a posi- tive working environment. Emphasis is placed on having the fund offer a working environment that attracts capable employees. The objective in new hiring is to engage qualified and ambitious individuals. Positions advertised are generally non-gendered and increased emphasis has been placed on maintaining a good work-life balance. With regard to non-discrimination, it is noted that employees are assessed on their own premises, without regard to gender, age, religion or origin, and care taken to ensure full equality among employees. The human resources policy is supported by the following policies: a policy against bullying and harassment, as well as a response plan; a wage equality policy; an equal rights policy; and a policy on information disclosure to employees. Emphasis is placed on following the main aspects of the fund’s human resources policy when advertising vacant management or other positions. COVID-19 The impact of the COVID-19 pandemic on fund’s operations, finances and cash flow during the year is insigni- ficant. When the epidemic began, it was expected to possibly result in a contraction in premiums paid to the fund, due to a decrease in wage payers’ activities, their increased defaults and payment difficulties for individuals due to rising unemployment. As always, the fund had emphasised working closely with fund members and wage payers in resolving the situa- tion that has arisen due to the pandemic and can be expected to continue for some time. Special emphasis has been placed on closely monitoring the trend in collection of premiums, but defaults have not increased. As soon as the pandemic reached Iceland, the fund began offering borrowers a grace period on their loans of up to six months with the possibility of an extension after that time. There was some demand for such deferment last spring, and more than 10% of the fund’s loan portfolio was in grace period at one point. This has decreased significantly and at year-end about 2% of loans were in a grace period. Amounts in default for more than 90 days have decreased year-on-year and the default rate at the end of the year was 0.7% of fund member loans. The fund adjusted its office operations to accord with the currently applicable epidemiological restrictions. For part of the year, the fund’s reception was closed and fund members were encouraged to use electronic communications to conduct their business. Applications for pensions were made available on the website during the past year, enabling fund members to apply for pensions electronically, in a simple and convenient way. In accordance with epidemic control measures, a large proportion of staff began working remotely. This change in operations went smoothly and without problems. It is evident that the spread of COVID-19 has negatively affected economic and market conditions in Iceland as elsewhere in the world, and there is still considerable uncertainty about the final effects of the pandemic. 130