Agenda item

Risk Register

The Committee is asked to note the report.

Minutes:

The Head of Pensions introduced the risk register explaining that the risk register was a live document and therefore it was important for it to reflect the discussion carried out by the committee.

 

Members were informed that since the risk register was last considered by the Pension Committee in September 2020, a number of changes had been made, these were highlighted in yellow and the new narrative was shown in bold red, in the risk register.

 

It was reiterated that in September the residual risk ratings for risks F1, F2 and F4 relating to the Pension Fund investment strategy and deficit position, were increased due to the impact of COVID- 19. Members noted these risks remained at the increased level.

 

The Head of Pensions was pleased to report that the G5 Risk had been reduced as a result of his appointment.   However, this remained a medium risk due to remaining vacancies in the accounting and investment team.

 

Members were advised that Risks A/R 1.1 & 1.2 had also been increased from a low to a medium risk.  It was noted that the Pensions Committee had previously agreed an increase in resource for the Pensions Administration Team in response to the introduction of the 2014 CARE scheme. However, since the launch of the 2014 CARE scheme, the administration team now faced dealing with McCloud ruling, the 95k cap, as well as an increased number of employers in the Fund. It was explained that Government were launching a pension’s dashboard initiative, which would also result in additional workload for the team.

 

The Committee were reminded that Hymans outlined the potential impact of these issues on the administration function in September 2020.  At that meeting, it was also requested that a review of resourcing requirements should be undertaken by the Head of Pensions. It was noted these risks had been increased until this review had been undertaken.  It was proposed that this review would be to brought back to Committee in January 2021, the Committee welcomed this approach. 

 

A member raised the issue of life expectancy and whether employers would try and promote a late retirement culture, given that life expectancy was decreasing.  Members also wondered if there was any idea nationally about the impacts of  Covid long term, given the number of people who could potential contract the virus before the vaccine is widely available.   

 

The Head of Pensions explained that Club Vita would be undertaking an analysis in terms of life expectancy.  He expected that would be reflected in the assumptions that contribute to the next valuation in 2022.  It was suggested that some good analysis could be provided that was bespoke to the members of the Gloucestershire Pension Fund.  The Head of Pensions agreed to take this point away and review the data available and an update would be provided at a future meeting or via a briefing note. 

 

In response to a question, it was noted that the Fund had previously purchased Fund level ill-health insurance, so in cases of ill health retirement the Fund and the Employers covered under the insurance were fairly well protected.  

 

During the discussion, members referred to the 95K cap and whose responsibility was it to communicate the impact of this ruling.  The Committee were advised that it was the employer’s responsibility to relay this information and not the Pension Fund. 

It was explained that the Pensions Administration Manager and his team had been actively providing information to employers on a regular basis regarding their responsibilities to the 95k cap.   The Local Government Association had been issuing a lot of information and were actively promoting webinars for employers. 

 

Members also remarked that the costs involved with Brunel needed to be closely monitored, given the fees involved in the transition and ongoing management of the investments. It was also noted that as part of the strategic move from passive to active management this would incur higher fees, however, you would expect greater returns on the investment.  The Head of Pension offered to review the risk register to ensure this was captured and was specific on the Funds risk on value for money and also how we were assessing that value for money was achieved  moving forward. 

 

Resolved

 

That the Committee noted the risk register, and supported the inclusion of the

the increased and proposed review in relation to risks A/R 1.1 & 1.2. Including the reduction in residual risk in relation to risk G5 and the continued increased position relating to residual risk ratings for risks F1, F2 & F4.

 

That it was agreed that a meeting of the Pension Committee be scheduled in January to discuss resourcing requirements in further detail. 

 

Supporting documents: