Agenda item

Consider report by Chief Financial Officer. (Copy attached).

With reference to paragraph 6 of the minute of 3 September 2015, there had been circulated a report by the Chief Financial Officer providing Members of the Committee and Board with an update on the progress of management actions to mitigate risks, a review of new risks and highlighting changes to any of the risks contained in the Risk Register.  Identifying and managing risk was a corner stone of effective management and was required under the Council’s Risk Management Policy process guide and CIPFA’s guidance “Delivering Governance in Local Government Framework 2007”. It was further reflected and enhanced in the “Local Government Pension Scheme” published by CIPFA.  Appendix 1, to the report detailed the risks within the approved Risk Register.  In line with the Council’s Risk Management Policy (2015) a paper would be presented to the June 2016 meeting demonstrating progress with a fully reviewed Risk Register, including consideration of any new risks.  It was noted that a full Risk Workshop had been undertaken on 3 September 2015 to ensure that the Risk Register’s content was up to date and no new risks had been identified.  

4.2       Mr Robertson advised that there had been discussion at UK national level on the pooling of pension funds and a drive to increase investment in infrastructure.  Officers were undertaking further work to evaluate possible implications for the Pension Fund and would report back to the Committee and Board at the March 2016 meeting.   Mr Robertson referred to Risk 4.1, that changes to the composition of the Pension Fund membership might lead to there being insufficient assets in the Fund to meet future liabilities.  Mr Robertson explained that this was indicative of the Fund maturing.   There followed a discussion on the long term consequences of Early Retirement Voluntary Service (ERVS) in relation to the Fund. If this policy continued it was considered that it would have a significant impact on the Fund going forward.  It was important to encourage younger employees to join the Fund to offset the number of Fund members retiring early.  In answer to questions, Mr Robertson clarified that the Actuary’s methodology, calculated what was expected in terms of loss to the Pension Fund when requests for ERVS were considered by Council.  The Pension Fund was then compensated based on the Actuary’s calculation.  Mr Robertson highlighted that changes to the cash requirement of the Fund to pay pensions altered the structure of the Fund, it was therefore essential to ensure the correct balance of liquid and illiquid assets.  Mr Robertson suggested that the Actuary be invited to a meeting of the Committee and Board to give a presentation on the impact of ERVS on the Pension Fund and this was welcomed.  It was noted that Risk 4.1 and Risk 2.5 were connected and Mr Robertson would look at the future presentation of these two risks on the Risk Register.

DECISION

(a)       AGREED

(i)        To the additional actions proposed in Appendix 1 to the report;

(ii)     To a full review of the Risk Register being undertaken in June 2016 to include progress on risk management actions and consideration of any new risks; and

(ii)       To receive a presentation by the Actuary on the impact of ERVS on the Pension Fund.  

(b)       NOTED

(i)        The management actions progress as contained in Appendix 1, to the report;

(ii)       That further information would be provided at the March 2016 meeting on the pooling of funds and infrastructure investments; and

(iii)      No new risks had been identified since the last review.