The Public and Commercial Services (PCS) union has warned that the administration of the Civil Service Pension Scheme could collapse amid concerns that the new provider, Capita, has missed implementation targets.
PCS members working at MyCSP, the current administration provider, have been on strike since the start of July over a lack of union representation during the handover process to Capita.
Capita is set to take on the Civil Service Pension Scheme from September this year. PCS members are planning a further six-week walkout, the union announced at the start of this month.
The union wants staff to be brought back in-house within the Civil Service, following a report from the National Audit Office (NAO) that criticised some elements of the outsourced administration arrangement.
PCS general secretary Fran Heathcote said: “The outsourcing of the Civil Service Pension Scheme has been an utter failure. And now there is a real risk of collapse, jeopardising the handling of the pensions of around 1.7 million scheme members.
“The Cabinet Office is currently leaving itself with a dire choice between a provider they didn’t think was good enough to carry on with the contract and another that they’ve admitted has bitten off more than they can chew.
“It is time for the staff administering the scheme to be brought back under the direct control of the Cabinet Office as civil servants.”
The NAO’s report, published in June, found that complaints against MyCSP had increased by 43% between 2016-17 and 2024-25 to a high of 4,780 in the most recent financial year.
Despite having made good progress on implementing changes related to the McCloud judgement, the NAO said MyCSP’s contact centre performance had been “below expected levels for at least the last two years, but this has not resulted in any contractual penalties”.
Regarding the transition to Capita, the NAO’s report expressed concerns that the new provider had already missed three “key milestones” as it prepares to take over the Civil Service Pension Scheme. This has led the Cabinet Office to withhold £9.6m in payments, with Capita now expecting the full service to be online by March 2026.
The new provider will save the Cabinet Office approximately £83m through “innovation and automation”, the NAO said, but added that the contract “does not have agreed milestones against which to manage performance”.
