Agenda item
Risk Register, Risk Management & Internal Controls Policy
- Meeting of Pension Board, Monday, 27th November, 2017 10.00 a.m. (Item 9.1)
- View the background to item 9.1
Minutes:
Bola Tobun, Investment & Treasury Manager presented a report which detailed the Risk Management Policy for the London Borough of Tower Hamlets Pension Fund. The report also included a Risk Register and set out the Council’s approach to internal controls in respect of the Pensions Fund. The report was tabled at the Pensions Committee on 21 September 2017
Members welcomed the report and were advised that the Risk Management Policy was still in working progress. Officers commented that a lot of work had been undertaken in relation to the document and that further work would continue. Overall the current Risk Management Policy was viewed as a ‘good starting point’ and it was noted that the document would continue to evolve.
Members held an in-depth discussion about the Risk Management Policy and noted the following.
· Risk - Failure to Manage Cost
There are two methods identified to help manage cost. This includes obtaining a cost breakdown from investment managers and comparing the sums. These figures will determine whether services would be cheaper if they are procured directly or through the LCIV. In addition the cost of Administration would also be considered. Members were advised that the Government produced data about local Authority Pensions Funds and that these figures would be used in benchmarking exercises. The above undertakings would be included in the LBTH Pensions Fund Annual Review
· Risk Accounts balance end of May.
Officers advised that work will be undertaken to ensure that steps are in place to ensure that questions are answered throughout the year and that the Service was aiming to publish 2017 / 2018 Accounts before the end of the financial year.
· Responsibilities
Members noted the Pensions Board Manager was Bola Tobun, Investment and Treasury Manager, Resources. The Pensions Manager is responsible for overseeing The Tower Hamlets Pensions Fund Risk Management Process (Risk Identification, Risk Analysis, Risk Control and Risk Management)
· Monitoring of the Risk Policy
Members were advised that the Independent Governor Advisers were LBTH Legal Service.
· Key risk to the effective delivery of the Risk Policy
Members commented about ‘Officer’s Risk’ and were advised that this risk would be included.
Members commented that the Pensions Board was rarely mentioned in the document; and was only referred to in Point 2 under Governance Risk (Frequent and extensive turnover of Committee / Board Members). Officers reminded Members that the Risk Management Policy was still in working progress and advised that Members of the Board and Committee received sufficient training and that they needed to be pro-active about attendance at meetings.
Members raised questions about GOV15, (Failure to Comply with Guidance Issued by The Pensions Regulator TPR) and noted that one of the risks was that the Council could experience reputational damage. Members noted that both the Pensions Board and Pensions Committee were part of the mitigating control factors in relation GOV15. Members stressed that there should be one key owner in relation to GOV15 and that controls/ mitigation should not be shared. Members advised that the role of the Pensions Board should be explained
Members highlighted that there were risk in relation to Councillor in particular surrounding their learning and training. The Pensions Board noted that there were to be local elections in the forthcoming year and that some Councillors will not be returning. Members commented on the importance of providing tailored training for new Councillors and that consideration is made in how information is presented to the said individuals. Members advised Officers about the risk involved with the Pensions Committee membership altering and stressed that this matter is given due consideration.
Members held a brief discussion about their Training Plan and requested that officers review the Plan and ensure that well received modules are replicated in the next training manual. This is hoped to ensure continuity of learning. Members commented that training on Asset Allocation should take priority and noted that it was one of the most significant modules.
Members were advised that the Modules toolkit (Pensions Regulator) monitored attendance at training, records scores and also details what modules have been completed by individuals. This information can be printed. Officers advised Members that they had a good training record and that a ‘traffic light’ system was in place which flags up any concerns about individuals Members not participating with the set learning. Members were reminded that training modules could be completed in their own pace and were requested to complete all modules by 12 March 2018.
Members noted that the Fund agreement policy required potential admitted bodies to have a guarantor / bond in place and requested that officers provide further information about the requirement. The Board was advised that it was a legal requirement for such bodies to have a Guarantor.
The meeting held further discussion about the risk register and commented that Risk GOV 6, Members having undisclosed conflict of interest, was not a risk. Members agreed that only major critical risks should be included in the Risk Register.
Members welcomed the Risk Register, Management & Internal Controls Policy and commented that the document was a good start and stressed that consideration should be made on how the document will be presented.
RESOLVED
1. To note the contents of the report in respect to the Risk Register, Risk Management and Internal Controls
2. That Pension Board Members complete all Pensions Regulator Modules by 12 March 2018; and
3. That further information be provided about the requirement of potential Admitted bodies having a guarantor/bond in place.
Supporting documents:
- Risk Register Risk Management Internal Controls Policy PB 27.11.17, item 9.1 PDF 123 KB
- Enc. 1 for Risk Management Policy and Register, item 9.1 PDF 111 KB
- Enc. 2 for Risk Management Policy and Register, item 9.1 PDF 177 KB