Issue - meetings

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

1)    Risk I3 – Regulatory Risk, has been increased to amber from green due to the likelihood of additional investment regulation that is anticipated with the implications not yet known. The Committee discussed that in relation to this risk, there are increased pressures on LGPS funds to invest in specific areas which would make it very challenging to manage the asset allocation.

Items under close review, without a change to the rating:

2)  Risk G3 – Cyber Security, is deemed the highest risk for the Council and Fund, as a result will continue to be closely monitored. Training has been provided to both Board and Committee members with further testing of internal policies and procedures being planned.

3)  Risk I5 – High Inflation impact on Funding level, will be monitored closely ahead of next quarter due to the recent changes in inflation, however other factors to be tracked may keep this risk at its current level.

4)  Risk I8 – Liquidity, is being more closely monitored whilst the Fund transitions to a cashflow negative position from member activities with increases in benefits paid out following recent high inflation and the reduction in contribution rates following the last valuation. Work is being carried out to identify whether more income will be required from investments to bridge this gap or if the investment strategy is sufficient. The Pension Committee will receive further guidance on liquidity as part of their strategy day.

5)  Risk I9 – Money Purchase Additional Voluntary Contributions is currently under active review by the Fund’s advisors. Officers will be considering a number of points discussed at the February Committee and Board meetings on the suitability of the default investment option available, in order to identify any weaknesses in the current offering and ensure appropriate recommendations are made to ensure these are resolved. The risk register will be updated to reflect any findings or actions from this work. Following the work already carried out on this area, Barnett Waddingham will support the Fund work to ensure that the best AVC offering is available. The risk will be updated if required.

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