The Cabinet Office has insisted that its decision to sell the 24% stake it held in mutualised Civil Service Pension Fund administrator MyCSP will not affect services offered to scheme members, or the benefits they receive.
Civil Service World reported yesterday that the department had raised £8m by offloading its stake in the spun-out joint venture to outsourcing firm Equiniti. The business, which specialises in providing administration and payment services for a range of public and private-sector organisations, already owned 51% of MyCSP, with the remaining 25% belonging to staff through an employment benefit trust.
MyCSP was the highest-profile public-sector spin out of coalition-era Cabinet Office minister Francis Maude’s mutuals drive. It currently looks after the pensions arrangements of around 1.5m current and former civil servants as well as providing pensions administration services to the House of Commons, the Forestry Commission, BAE Systems, the BBC, and the NHS among others.
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In parallel with the announcement of its purchase of the Cabinet Office’s 24% stake in MyCSP, Equiniti also confirmed that the joint venture had been awarded an extension for its contract to provide pension administration and related services for the civil service, allowing the arrangement to continue until December 2021.
The Cabinet Office said it intended to run a competitive tender process to award a new contract for the services currently delivered by MyCSP in 2021 and that the timing of the sale had been “driven by a desire to make sure there is a robust market for tendering the new contract”.
It added that in addition to pension scheme members being unaffected by the stake-sale in MyCSP, it expected there to be no change to employees’ terms and conditions.
“By taking the opportunity to sell our shares in MyCSP to Equiniti, we have raised £8m for the taxpayer,” a Cabinet Office spokesperson said.
“MyCSP was established as a company in 2012, jointly owned by its employees, Equiniti and the government, and has since improved services for pension scheme members and delivered millions of pounds of savings to the taxpayer.”
MyCSP’s history has not been turbulence-free, however. Two years after it was set up the organisation took over pension and payroll services previously provided by Capita, only to run into difficulties with late payments to thousands of pensioners. Problems stemmed from the introduction of a new pension-administration IT system called Compendia and low staffing levels.
A National Audit Office report in 2016 said the watchdog had identified "dozens of individual stories of hardship, distress and inconvenience" caused by late payments and that the administrator had failed to answer almost 100,000 calls from concerned scheme members between September 2014 and March the following year.