Agenda item

An update from the Chief Finance Officer on the Wiltshire Pension Fund Risk Register is circulated for Members’ consideration.

The Committee considered a report by the Head of Pensions which gave an update in relation to changes to the Fund’s Risk Register. It was noted that the following four items had changed or been updated since the last

report:-

a)      PEN001: Failure to process pension payments and lump sums on time – This has increased from green to amber reflect the upgrade of the pension database from AXISe to Altair which took place in August.  Although it’s not anticipated any significant issues will arise that prevent setting up new pensioners into payment, any implementation inherently carries an increased risk.  The system is being monitored to ensure any post implementation issues are identified and remedied immediately. 

b)      PEN004: Inability to keep service going due to loss of main office, computer system or staff – This risk remains at amber although the concerns surrounding the fire proof storage of the microfiches are currently being addressed through the planned procurement of two fire safes and the outlining of a business case to transfer these records to digital media.

c)      PEN006b: Significant rises in employer contributions for non-secure employers due to increases in liabilities& PEN007b: Significant rises in employer contributions for non-secure employers due to poor/negative investment returns – These risks has been revised down to amber from red.  Increases in employer contributions are expected from the 2010 Valuation although the recent announcement from the Government to link pension increases to the Consumer Price Index (CPI) instead of the Retail Price Index (RPI) from April 2011 will have a significant impact on the liabilities of the Fund.  The longevity risk is also being addressed through the use of Club Vita mortality data which is far more accurate as it’s tailored to the Fund’s specific membership which again may reduce liabilities, although not as significantly.  Alongside this, officers have set up a framework to review the long term financial stability of non-secure employers which will recommend the levels of flexibilities to adopt in regards the increases in employer contributions over the next three years.  This should assist in addressing employers affordability issues and prevent significant increases in the short term.

d)      PEN10: Failure to keep pension records up-to-date and accurate – Although the risk remains Amber, the latest audit report discussed elsewhere on this agenda has highlighted that records were not in a consistent form and some pieces of information were missing.  With the implementation of SAP, Altair and the on-going review of the internal processes this is an area being developed.  Methods of improving the quality of data being collected and held are currently being explored.  As Altair is now live the implementation of the imaging and workflow systems can be addressed which should mitigate this risk.

Following discussion it was agreed that the Head of the Pensions Fund should update the Committee on the business continuity procedures in place for the Fund. Furthermore it was agreed that two fire safes, discussed at the previous meeting should be purchased to address the PEN004 as soon as possible.

Resolved:

a)     To note the update to the Risk Register

b)     To approve the Head of the Pension Fund to purchase two fire safes under delegated powers, for a total of £7000.