To note the contents of the report and register.

Damien Pantling reminded members that at the last meeting he stated he would carry out a review of the risk register, and this had now been completed. He explained he had done this in line with CIPFA frameworks and by using the same best practice methodology as a number of other LGPS funds. The risks had been divided into seven categories on the register and this would be updated each quarter. Damien Pantling explained that his intention was to include appendices at each meeting that would outline any changes to the register, as there were more than 50 items included. Quarterly updates would go to each Committee meeting.

It was noted that risk PEN003 referred to markets being affected by Covid. Damien Pantling said markets were improving but may still end up being affected by the pandemic, there had not been a negative impact on the Berkshire Pension Fund’s investment performance overall, and the intention of the risk was to ensure that investments remained healthy. Regarding risk PEN006 it was agreed that it should worded as a change in government policy as being the potential risk, rather than simply a change in national government.

Damien Pantling said the reputation risk level for PEN012 was a four because if a wrong decision was taken in relation to longevity then it could have a detrimental impact to the reputation of the Fund, referring to a decrease in longevity rates following the purchase of a longevity swap given the Berkshire Fund was the only one in the LGPS with this instrument. In relation to PEN023 it was agreed that this should refer only to smaller employers, as there was a greater likelihood of a final active member leaving the Fund compared to a large corporation. It was agreed to amend PEN025 to mention the Pension Board in addition to the Committee.

Responding to a question from Jeff Ford regarding inflation, Damien Pantling explained there were two types of inflation (one is ancillary to economic growth); one of these included wage, salary and liability growth but without the assets catching up to match this. It was therefore possible for a funding gap to emerge as a result of “bad” inflation and explained why this had been identified as a risk. Damien Pantling said this was monitored through the triennial review by the actuary and managed through the investment strategy.

Regarding administrative and communicative risks, members were told there was an expectation that employers would contact the Fund if there were any issues and this was generally the case with larger employers. However in some cases the Fund would contact some employers if there was an identifiable risk.  At-risk employers would be identified through the actuarial covenant review following on from the LPP review in 2019.

Julian Curzon asked if there had been any data breaches that had required reporting to the Information Commissioner’s Office. Kevin Taylor said there had not, and if there had been it may not be appropriate to discuss in the Part I section of the meeting.