Issue - meetings

This is the latest risk register as considered by the Pension Fund Committee on 11 September 2020.  The Board are invited to review the report and offer any further views back to the Committee.

The Local Pension Board considered the latest risk register as considered by the Pension Fund Committee on 11 September 2020.  The Board were invited to review the report and offer any further views back to the Committee.

During discussion members:

·         Highlighted Risk 13 - the risk of intervention from the Pension Regulator in respect of the skills and knowledge of the Committee. Concern was expressed that the Committee was at the bottom of the 18 Funds who took part in the recent survey and that this increased the risk of the loss of professional investor status. The key issue would be what happened as a result of the skills and knowledge audit and how seriously it was taken. It was agreed to recommend to the Pension Fund Committee  that Risk 13 be strengthened to reflect the concerns of the Board.

·         Noted that an additional risk had been identified at the Pension Fund Committee relating to the exit payment cap and this would be added to the register.

·         Discussed the risks relating to FE/HE employers defaulting or withdrawing from the scheme. It was noted that unlike for the academy sector the Secretary of State had not given a guarantee to underwrite the impact in the FE/HE sector.

11:40

This report updates the Committee on the Fund’s Risk Register, updating the position on risks reported to the last meeting and adding in new risks identified in the intervening period.

The Committee is RECOMMENDED to note the changes to the risk register and offer any further comments.

Recommendations Agreed.

The Committee had before it a report (PF10) which updated the Members on the Fund’s Risk Register, setting out the position on risks reported to the last meeting and adding in new risks identified in the intervening period.

Mr Collins reported that since the risk register was last updated in March, there had been a number of significant events, including the Covid-19 pandemic, the publication of the consultation on changes to the LGPS Regulations as a consequence of the McCloud case, and the revision of the Committee’s Investment Strategy Statement including the new Climate Change Policy.  The risk register had been reviewed in light of those events.  One risk had been lowered, risk 2, and two increased.  There were now 4 risks which required regular review, and these were set out in the report.  He further reported that they had taken on the point from Local Pension Board to report the risks in future to every Board meeting.

One fourth risk scored Amber was the new risk 20 from the March register which covered the implications of the proposed new Regulations seeking to remedy the Court decisions in the age discrimination cases brought by McCloud and Sargeant.  It was now known that the proposals involved bringing a wider group of scheme members within the current protection arrangements, initially only offered to those with 10 years of retirement.

The proposed changes would involve the Administering Authority having to complete 2 calculations for each scheme member to determine whether they were better off under the new 2014 CARE arrangements, or the previous final salary arrangements.  The additional calculation to determine a member’s pension entitlement under the previous final salary arrangements would require data not routinely maintained on the pension’s software since the scheme changes in 2014.  Whilst Oxfordshire has continued to collect this data from scheme employers since 2014, it had not been fully validated or loaded to the pension record.  The data had not been provided where members had transferred into the Oxfordshire Fund since 2014. 

There was therefore a significant risk that for certain scheme members, the Fund would not hold the data required to carry out the final salary pension entitlement, and/or would not be able to obtain/validate it from the scheme employer who could be outside the Oxfordshire Fund, had ceased to exist, no longer be a member of the Oxfordshire Fund, or changed their payroll provider since 2014.  It was also likely that in some cases the information would need to be obtained/validated from multiple employers.  There would a significant risk therefore that the required calculations will not be possible in all cases.

The second element of this risk related to the increased administrative effort required from both the scheme employers and the Administering Authority in order to meet the increased requirements.  Even where it might possible to obtain the necessary data, there could be insufficient resources to complete the task.  As this was a task that will impact across the whole of the LGPS, it was  ...  view the full minutes text for item 114