Issue - meetings

71.1     The Committee considered a report on the ESPF Risk Register.

71.2     The Committee discussion included the following key issues:

·         Based on earlier discussions around the impact of Covid-19, the Committee recommended that it be added as a risk on the risk register.

·         There are regular meetings of the Data Improvement Programme and it is recognised that there are a number of key milestones in March that are likely to determine the success of the programme.

·         Following the failure of the Ruffer transition to a sub fund, ACCESS is project managing Link.

·         The employers that have the highest rate of non-returns of the data needed to produce the Annual Benefit Statement (ABS) are the largest employers in the Fund, including Wealden District Council, Brighton & Hove City Council and East Sussex County Council.

·         It would be more effective if the Fund internally manages employers who fail to comply with the data requirements, rather than report them to the Pensions Regulator. The Pensions Regulator has already seen that the Fund has a plan to resolve the ABS breach and is unlikely to act on individual referrals of employers by the Fund. The Committee offered to assist in ensuring the compliance of employers.

71.3     The Committee RESOLVED to:

1) note the report;

2) request that a letter is sent on behalf of the Committee to the Chief Executives of the 10 employers of the East Sussex Pension Fund with the poorest pension data compliance records outlining their responsibilities and the potential measures that could be taken against them for continued non-compliance;

3) recommend that the risk of Covid-19 to the East Sussex Pension Fund, including the impact on cash flow and long term bond yields, is added to the Fund’s risk register; and

4) recommend that the likelihood of Risk 17 – ACCESS Pool Governance – Resourcing be increased from 2 to 3.

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42.1.      The Board considered the Pension Fund Risk Register.

42.2.      DP asked why the data cleansing risk score was the same pre and post mitigation.

42.3.      MK said that this was because she did not want to pre-empt the data cleanse results from the data improvement project before reducing the risk relating to data cleansing.

42.4.      Councillor Carmen Appich (CA) asked whether it would be possible to withdraw from ACCESS if there were major concerns about LINK’s performance.

42.5.      MK said that ACCESS is a statutory pooled fund that all LGPS are required to be part of. To withdraw altogether would likely require the Secretary of State’s permission. Alternatively, the Section 151 officer’s role in ensuring the financial sustainability of the Fund under the Local Government Act 2003 could allow the ESPF to transfer to an alternative pooled fund.

42.6.      CA asked to what extent other ACCESS members were involved in improving their Environmental, Social and Governance (ESG) investments. 

42.7.      Ian Gutsell (IG) explained that ACCESS was not signed up to the principle of responsible investment, unlike the ESPF. The ESPF is the ACCESS lead authority on ESG issues and work towards codifying ESG matters in ACCESS investment principles. GF added that individual funds could not choose their investment manager for assets pooled with ACCESS, this meant it requires collective agreement that investment managers with strong ESG credentials are chosen by the ACCESS operator for custody of the individual funds’ assets. To date, the interest from the other Funds in ESG matters varied. LW said she would raise the matter via Unison.

42.8.      The Board RESOLVED to note the report.