Issue - meetings

65.1     The Committee considered a report introduced by Sian Kunert who drew the Committee’s attention to the following risks:

1)    Risk E3 – Employer Covenant, has been increased in likelihood, moving the overall risk score to a 6. This is because an increasing number of Local Authorities are at risk of a s.114 notice and not having sufficient cash to meet their expenditure. Pension payments would be expected to continue in such circumstances but it is unclear what would happen in the event of a Local Authority not being sufficiently solvent. This rationale has also seen the suggested pre-mitigation likelihood increase. Officers advised that other funds have not reported issues with collecting contributions where Section 114s have been issued so the mitigation is appropriate.

2)    Risk G1 – Key Person Risk, has increased. A member of the Officer leadership team has recently left, it is believed there may be delays in finding a suitable candidate for the vacant position and agency support for the team has not yet been successful.

3)    The definition of risk G5 – Data Breach, has been updated to make it clear that the risk does not just apply to GDPR, other Regulations exist which determine how data is handled and used. The language has been updated to reflect a wider perspective.

4)    Risk G6 - Fraud, has seen its likelihood being reduced. Fund Officers have not seen material cases of fraud either against the Fund or its members. Mitigations in place are believed to be effective, however, it is recommended that the risk remain on the register as both a point of good practice and the potential pre-mitigation risk level.

5)    Risk I6 – ESG, has seen both pre and post mitigation likelihood scoring
increase. There is expected to be an increase in the level of political interest in this area which will mean it is more likely further action will need to be taken by the Fund. Risk I7 – Climate Change has had its post mitigation risk increased for the same reasons. There are high levels of complexity which must be approached with effective stewardship.

65.2     The Committee noted that some risks are being closely monitored and are set out in the report. Whilst the rating has not changed these risks are being regularly reviewed by officers this includes the long run inflation assumptions in the funding position.

65.3     The Committee RESOLVED to note the Pension Fund Risk Register.