Agenda item

The Acting Pensions Manager presented the report.

The Head of Finance, Business and Pensions said that many risks could not be eliminated, but could be mitigated. He drew attention to the management of the different kinds of investment risk including the management of long-term risks through the investment strategy. In its efforts to reduce risk the Committee engaged with investment managers and was supported by investment advisers.

A Member asked how the Committee engaged with the risk register. The Head of Business, Finance and Pensions replied that a report including the top ten risks was considered by the Committee at each quarterly meeting.

The Chair said that the Board could be satisfied that the Fund had a risk management system in place: there was a risk register, risk monitoring, risk reporting and mitigating actions. He suggested that the Board, in accordance with its duty to ensure compliance, should focus on regulatory compliance risks and governance risks. He noted that some LGPS funds do not have a risk register.

After discussion Members agreed to focus on the top 10 risks as perceived by the Committee and risks relating to regulatory compliance, governance and communications.

The Head of Audit West commented on Internal Audit work on the Avon Pension Fund. He drew attention to the summary of work in Appendix 3. In broad terms about 30 days of Internal Audit work a year were dedicated to the Fund, which allowed 1-3 areas to be reviewed each year, depending on the nature and scale of the reviews. Appendix 4 contained the full draft report of the review of contributions and member records finished in February 2016. The Audit Team Leader commented on the report. The Head of Audit West noted that the assessment for the control framework was 4, “good”. Five issues were detailed in the action plan. The Chair said that the Board would want to check that these actions had been implemented within the specified timescale and requested that an update be provided at an appropriate future meeting.

The Head of Audit West explained that there was no separate Internal Audit plan for the Pension Fund. Work scheduled in relation to the Fund was included in the Council’s audit plan. Work planned for the future included the remaining aspects of the CIPFA 2014 pensions governance review (there were about 3 or 4 modules to be completed) and a review of payroll. The Chair asked why payroll was being reviewed so soon after the last review in 2014. The Head of Audit West replied that payroll was normally reviewed every three years.

The Chair suggested that one area that should be reviewed was the accuracy of benefit calculations. The Head of Audit West responded that this had been reviewed previously.

The Chair requested that the reports of the External Auditor should be included on the next agenda.

RESOLVED to note

1.  The Internal Audit report and that a report on the completion of the recommended and agreed actions would come to a future meeting.

2.  The Risk Register.

3.  The Audit Plan for 2016/17.

4.  The External Audit Plan would be considered at the next meeting.