Agenda item

This is the latest risk register as considered by the Pension Fund Committee on 4 December 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 4 December 2020.  The Board were invited to review the report and offer any further views back to the Committee.

Sean Collins, Service Manager Pensions, advised the Board that the Committee had accepted the comments made by the Board at their last meeting. Discussion at the Committee had centred around the new Risk 21 and the Committee had endorsed the short-term policy relating to the £95,000 exit cap.

During discussion members:

·       Highlighted concern over Risk 13 given the local elections scheduled for May 2021. There was a query on the level of scenario planning being undertaken to respond to the situation after May. The Chairman referred to his experience with a new Unitary Council where the entire membership of the Pensions Committee had been new. What was important was the robust training plans in place as part of the induction of new councillors. A further protection for the Committee was the requirement to take appropriate advice; from officers and from the Committee’s pensions advisor. Sean Collins added that there was an induction pack ready for new members should that be the case. Also, there was a policy that new members in their first year on the Committee must complete the LGA Fundamentals three-day training or the online training from the Pensions Regulator. If there was an item at a particular meeting that members were not aware of there would be pre-Committee training. Sean added that it was not yet known what the Hyman’s report would say about the governance arrangements and what the future shape of the Committee might look like. Whatever the final make-up of the Committee, with the training plan in place and advisors to provide support we were well prepared.

·       Queried, in relation to paragraph 13 of the report, on Risk 8 concerning the risk of employer default whether the risk should be amended to reflect a worsening situation with the country in a third lockdown creating additional financial pressures. Sean Collins responded that there was no feedback or evidence of financial problems for the FE/HE employers in the scheme. A Scheme  Member representative added that it was her understanding that enrolment at Brookes was at 116% and there were no worries currently.

·       Suggested that the risk of default from outsourced contractors such as cleaners and caterers was a growing concern. Sean replied setting out the reasons why there was less impact from the risk from outsourced contractors compared to FE/HE colleges. The amounts involved in outsourced contractors was smaller than the FE/HE sector and generally underwritten by the employers who had outsourced the work. The impact was less on the Pension Fund as a whole.

·       Noted the importance of a read across between the risk register and the business development plan.

·       Referred to Risk 18 and the work in hand by the Climate Change Working Group to understand how the portfolios offered by Brunel can be aligned to the Paris Agreement.

·       Discussed the risks around the McCloud Judgement. It was suggested by a Scheme member that in the light of research by Unison that indicated that the numbers involved and thus the impact would be small, the impact of 4 as set out in the register was unlikely. Sean Collins advised that the score reflected the reputational and work impact risks as much as the finance aspect.

·       Heard that the risk register for Gloucestershire was predominantly the same in terms of the risks covered, mitigations and the presentation of the information.