The Pensions Board of Staffordshire Council met on Friday 26 June 2026 to review the Staffordshire Pension Fund's Risk Register and Risk Management Policy. The Board also received the Local Pension Board's Annual Report for 2025/26 and updates on various regulatory changes affecting the Local Government Pension Scheme.

Staffordshire Pension Fund Risk Register and Risk Management Policy

A significant portion of the meeting was dedicated to reviewing the Staffordshire Pension Fund's Risk Register and Risk Management Policy. The report pack outlined the Fund's approach to identifying, assessing, and managing risks across four key areas: Governance, Funding, Administration, and Investment. The Risk Register details high-level risks associated with the Fund's objectives, broken down into more specific risks with impact and likelihood scores, leading to a Red-Amber-Green (RAG) rating. Controls and sources of assurance are documented for each risk.

The report highlighted that the Local Pensions Board (LPB) has been actively involved in reviewing the Risk Register alongside officers. The LPB's observations, presented in Appendix 1 of the report, indicated that the Risk Register is considered robust and comprehensive, with a well-managed review process. The Board expressed its view that continuing to attend the Officer Working Group meetings for risk review would be valuable.

The Pensions Committee was asked to approve the updated Risk Management Policy for the Staffordshire Pension Fund, which details the Fund's attitudes to risk, its aims, and how risk is measured, managed, and assigned responsibility. The policy emphasises that while not all risks can be eliminated, accepting and actively managing them is crucial for the Fund's objectives, particularly in relation to investment matters. The main strategic risk identified is the failure to meet liabilities and pay benefits when due, which is managed through the Funding Strategy.

Local Pension Board Annual Report 2025/26

The Board received the Local Pension Board's Annual Report for 2025/26. The report stated that the Board has no concerns about the Staffordshire Pension Fund or its administration, finding it to be well-managed and compliant with regulations. The report detailed the Board's membership, meeting attendance, and work programme, which included monitoring compliance with regulations, the Risk Register, and the development of the LGPS Central Pool arrangements. The Board also reviewed internal and external audit reports, noting that all received substantial assurance. Emerging risks, including global economic challenges and the Fund's approach to sustainability and ethical investment, were also highlighted as areas of interest. The report confirmed that no significant issues of concern or conflicts of interest were declared by the Board during the year.

Regulatory Updates and Administration Challenges

Several agenda items focused on significant regulatory changes impacting the Local Government Pension Scheme (LGPS). An update from the Local Government Association (LGA) and the Scheme Advisory Board (SAB) covered the Access and Fairness consultation, which proposed changes to be implemented in two stages. The LGPS (Miscellaneous Amendment) (Member Benefits) Regulations 2026, which came into force on 1 April 2026, include provisions for survivor pension equalisation (retrospective to 2005) and the removal of the age 75 cap on death grants (retrospective to 2014). These changes present administration challenges, requiring the disclosure of regulatory changes to scheme members by 30 June 2026, identification of in-scope records by 1 July 2026, and rectification by 1 January 2028. Software updates and internal process revisions are necessary to manage these changes.

The report also detailed changes related to the Gender Pensions Gap, specifically concerning unpaid leave. For authorised absences starting after 31 March 2026, pension contributions become compulsory for short authorised breaks lasting less than 15 calendar days. For longer absences (over 14 days), members can elect to buy back lost pension through Qualifying Additional Pension Arrangements (QAPAs).

Further updates from the LGA covered the Access and Protection consultation, with a partial response published on 25 February 2026, focusing on pensions for elected members. The LGPS (Amendment) (Elected Member Pensions) Regulations 2026, effective from 11 May 2026, allow councillors and directly elected mayors in England (excluding town and parish councillors) to join the LGPS via an opt-in election. These members will have a specific pensionable pay definition and contribution rates, with key differences from the main LGPS, such as no flexible retirement or redundancy options.

The LGA also provided an update on the Fit for Future proposals, with draft regulations concerning pooling, management, and investment of funds expected to come into force on 30 June 2026. Key milestones include the delegation of investment management to pools by 30 September 2027, updated investment strategies by 31 March 2027, and the appointment of a named Senior LGPS Officer by 30 December 2026. Additionally, an independent advisor is to be appointed to the Pensions Committee by the same date, and an independent governance review of Funds will be required every three years, with the first by 31 March 2028.

The Scheme Advisory Board's (SAB) 13th annual report (2024/25) was also presented, highlighting an increase in LGPS membership and assets.

Administration Risks

The Board reviewed the risks relating to the Administration of the Staffordshire Pension Fund. A high-level risk was identified concerning the need for appropriate resources to manage increased workloads while maintaining service standards, particularly due to new LGPS regulations and ongoing projects like McCloud and Pensions Dashboards. Seventeen areas of medium-level risk were also detailed, encompassing staffing and resourcing, service delivery performance, technology and systems (including AI), business continuity, employer engagement, the impact of Local Government Reorganisation, and Pensions Dashboards data cleansing. These medium risks were considered well-managed with appropriate controls.

The report noted that the Fund's Risk Register is considered robust and comprehensive, with the Local Pensions Board actively participating in its review. The Board's observations indicated satisfaction with the process and the Officer Working Group's approach to risk management.

The meeting also included discussions on the Staffordshire Pension Fund's Risk Register and Risk Management Policy, with recommendations for the Pensions Committee to note the high-level and emerging risks, the LPB's review, and to approve the Risk Management Policy. The committee was also asked to consider the LPB's continued role in the ongoing review process.