The Director, West Yorkshire Pension Fund, will present a report,

(Document “A”), which presents West Yorkshire Pension Fund’s latest risk management report.

Recommended –

That WYPF’s latest risk management report be noted.

(Yunus Gajra – 01274 432343)

The Director, West Yorkshire Pension Fund, provided a report,

(Document “A”), which presented West Yorkshire Pension Fund’s latest risk management report.

Members attention was drawn to two additional risks identified since the issue was last discussed and those were Local Government Pension Scheme (LGPS) regulation changes as a result of the McCloud ruling and the potential loss of shared service contracts.  A brief explanation of the McCloud ruling was provided and advised members that this was due to a challenge made by trade unions that age discrimination had occurred following changes from final salary pensions to Career Average Revalued Earnings (CARE). The Government had lost that challenge and a massive piece of work was required to look at memberships and recalculate benefits. The fund had engaged with software providers to process those calculations and receive historical data from employers.  Government guidance was awaited. 

Concerns were raised that beneficiaries could be overpaid and it was questioned what measures were in place to address that issue.  It was explained that legislation was awaited, however, assurances were provided that members would not lose out and they would receive the better of the CARE or Final Salary schemes.  It was queried if the McCloud ruling would have any impact on survivors’ pensions and it was confirmed that was the case.

A Member representing Kirklees explained the majority of concerns she heard from constituents were wanting an end to investment in fossil fuels and that there was an increased appetite for renewable energy.  She questioned why the risk register did not contain reference to that topic.  In response she was advised that the risks being considered were for the administration of the fund and it was the Investment Advisory Panel which would consider risks to investments.

The economic impact of the COVID pandemic was questioned and it was explained that home working or some highbred version of that would continue and would minimise the need for additional office space.  Investment had been made in technology to allow people to work from home and had tested the funds resilience to continue to operate with minimum impact.  A positive effect of working from home had been reductions in energy use.  The Risk Register was reviewed every two to three months and whilst if did not currently contain any reference to climate change that could be added in the future.

The impact of increased deaths due to the pandemic was questioned and Members were advised that the staffing structure was continually reviewed.   The teams dealing with those issues had been given additional resources in recognition of the additional work required.

Retention and recruitment was discussed and arrangements for in-house training and career progression queried.  It was explained that many pension funds had issues with recruitment and retention due to the governance required.  A report being considered later in the meeting would cover those issues.  Staff turnover was recorded as 4.2% and was due to the fund encouraging and providing training opportunities; the fund paid for staff to further their qualifications; time off was granted and training was embedded in career grade schemes.  The fund scored well in those areas against CIPFA benchmarks.

Resolved –

That WYPF’s latest risk management report be noted.

ACTION:       Director, West Yorkshire Pension Fund