Top risks in the period under review: Risks 6 to 10

Counterparty risk

Medium

Description

The likelihood that a counterparty will fail to meet its obligation to the Fund. The Fund’s systems are integrated with various counterparties’ systems to enhance business operations. Their systems could be compromised and used as a conduit to attack the Fund.

Severity

Medium

Opportunity

Leveraging partnerships to enhance efficiency of business operations.

Risk response

Secure API (Application Programming Interface) and communication encryption.

This risk is expected to remain stable.

Capitals impacted

Fraud risk

Medium

Description

The payment of claims and other forms of payment is inherently associated with the risk of fraud. Fraud not only results in financial loss but also erodes members' trust, damaging the Fund's reputation.

Severity

Medium

Opportunity

The need to manage fraud risk provides an opportunity to continuously strengthen internal controls, enhance fraud detection capabilities and reinforce a culture of integrity and accountability across the Fund.

Risk response

Regular fraud risk assessments, supported by the continuous enhancement of internal controls and fraud prevention measures.

This risk is expected to remain stable as there are no major indicators of escalation.

Capitals impacted

Interest rate risk

Medium

Description

More than 77% of the Fund's investment portfolio is invested in interest-bearing assets. A significant decline in interest rates could materially reduce investment income and adversely affect the Fund's financial performance.

Severity

Medium

Opportunity

The Fund is taking advantage of the current high interest rates on government securities.

Risk response

Diversification into alternative asset classes.

The expected expansion of the oil sector may reduce the Government's dependence on domestic borrowing. If this leads to a sustained decline in interest rates, the Fund's investment income could come under pressure.

Capitals impacted

Litigation risk

High

Description

Litigation risk was considered high due to the high number of litigation cases, the reduction in cases from 55 in 2025 to 44 in 2026, notwithstanding. Besides, the Fund’s success rate in litigation is not only high but increased from 92% to 98% in 2026.

Severity

High

Opportunity

A robust and effective litigation strategy can generate financial and reputational dividends for the Fund.

Risk response

Engagement of experienced internal and external legal counsel to protect the Fund's interests and effectively manage litigation matters.

Due to the high inherent risk associated with land in the country, this risk is likely to remain high.

Capitals impacted

Reputational risk

Low

Description

Reputation risk remained within acceptable limits, supported by consistently positive media sentiment, which averaged 94.2% throughout the year.

Severity

Low

Opportunity

The Fund can leverage its positive reputation to build stronger stakeholder relationships, increase member participation, and accelerate the achievement of Vision 2035.

Risk response

Continuous monitoring of media sentiment, supported by timely engagement and response to adverse media coverage to protect the Fund's reputation.

This risk is likely to remain low as the Fund continues to improve service delivery and strengthen stakeholder engagement.

Capitals impacted