Civil service pensions: What's going on at MyCSP?

Special report: Ministers made bold promises about the impact of mutualisation on civil service pensions. But as Matt Foster reports, administrator MyCSP has left some retired officials tearing their hair out

By Matt Foster

22 Jun 2015

It was supposed to kick-start a “revolution” in public services, but there’s no doubt that the government’s flagship mutual has had a tough start. Since late last year, Civil Service World has received a steady stream of correspondence from current and retired civil servants venting their frustrations with pensions administrator MyCSP. Readers have told us of inaccurate pension statements, ignored letters, interminable call centre waiting times and even, in some cases, delayed payments that have left them out of pocket. 

“I have received my lump sum, nearly a month late and after two phone calls,” wrote one. “I believe we are all due enormous apologies from on high as well as compensation – not just for those who have had cash flow problems but for all the stress and time spent trying to get them to manage our pension payments.”

Another wrote to tell us that while he had retired from the service at the end of February, he was still awaiting payment more than two months later. “Although all the forms were submitted to MyCSP well in advance, I am still waiting to be paid. I am phoning daily and have to put up with the awful menu system. Despite promises to call back they never have... The contact centre staff have all my details but cannot tell me when I will be paid or why there is a delay. The message seems to be: wait a few more days and see if anything happens.” Some even told us that only a letter to cabinet secretary Sir Jeremy Heywood had finally seen their concerns addressed. 

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'Fit for purpose'

MyCSP certainly has a lot on its plate. As well as overseeing 1.5m civil service pensions – worth some £4bn a year – it is also navigating through uncharted waters, having been “spun out” of government in 2012 under a much-heralded joint mutual model. Ministers said MyCSP’s mutualisation had the potential to transform “a neglected back-office operation into a new competitive and responsible business”, bringing in private sector investment at a time of austerity and ahead of a major shake-up of civil service pensions in April this year. 

Under the joint mutual model – opposed by unions including Prospect and PCS amid claims it represented “back-door” privatisation – ownership of MyCSP is split three ways. Private firm Equiniti holds a 51% stake (up from 40% at launch), with government retaining a 24% stake and the mutual’s staff holding the remaining quarter through an employee trust. While the administrator’s staff transferred from the public sector back in May 2012, MyCSP only took over the contract for making pension payments from outsourcing firm Capita last September, and it’s at this stage that problems with the service first became apparent.
Naomi Cooke of the FDA union – which represents 18,000 senior officials, and which passed a resolution at its annual conference calling for MyCSP to be made “fit for purpose” by the end of 2015 – tells CSW her members have been struggling with a range of issues since the handover.

“We have had unacceptable delays in payments and problems with getting exit quotes in a timely fashion, which then causes a lot of stress and confusion for members who have an end of service date approaching,” she explains. “This causes problems for employers as well in trying to manage that. For those doing what we would hope – a bit more prudent longer-term planning – we’re seeing inaccuracies in pension statements when, indeed, people do receive them. And there are other issues with both the accuracy and timeliness of responses to queries.”

'Lack of information'

So what lies behind the trouble? The introduction of the new Alpha scheme on April 1 – which moved many officials to a career average rather than final salary arrangement – undoubtedly complicated matters. One serving official with more than three decades of service told us that MyCSP had struggled with his move from the “Classic” scheme to the new arrangement. 

“In order to ensure that my long service under Classic was preserved under the final salary terms it was necessary to opt out of the scheme and then opt back in,” he explains. “That process has taken six months. It has only just been resolved despite being started in late November last year.

“And that is nothing – I’ve got a lot of colleagues who have tried to do the same sort of thing. Like me, there are a lot of people in the service who have got a long number of years under their belt who were obviously trying to make sure that their previous scheme was locked in and preserved and have been having the same sort of problems with a lack of information.”

Like all of those CSW has spoken to, the official is keen to stress that his own battles with the administrator are “no reflection on the staff that work there – they’ve been as helpful as they can be”. But he believes that either inadequate staffing levels, problems with IT, or poor communication between government bodies and MyCSP – “the left hand not speaking to the right hand” – means that the level of service is falling “quite dramatically” short.

Retired HMRC official Penny Thorne shares the view that, while individual MyCSP staff have been “personally very helpful”, the new arrangement seems to have thrown up barriers between the departments and the administrator that weren’t there before. “My biggest problems have not been with MyCSP,” she says. “They’re actually more to do with the structure of the relationship between the employer and MyCSP. The new contract – now that MyCSP has been made independent – means that MyCSP staff can’t just speak to the [government] HR service centre to confirm details. They actually have to do it as a formal communication and a logged demand, so they have to take data off the official HMRC system even if they have been advised that information is not correct.”

The problems seem to have been particularly acute for ex-officials who’ve gone abroad to enjoy their retirement. Rosalind, a retired civil servant who has been receiving a pension in Spain for over a decade, told us that under the previous administrator she had been paid “within two days” of her pension date. However, she says that since the switch to the WorldLink payments system used by MyCSP, she’s experienced delays of “up to eight days” – with her most recent payment still in limbo more than two weeks later. “The call centre of MyCSP are very pleasant but cannot offer a solution,” she adds.

'Improved dramatically'

How seriously is MyCSP taking these issues? Ministers have been quick to defend the steps taken by the mutual since the problems were first raised. Responding to a parliamentary question in January, then-Cabinet Office minister Francis Maude said that many of MyCSP’s problems had been “inherited from the previous supplier”, with more than 5,000 cases of delayed or missed payment already on the books when it took over admin duties from Capita. And he assured MPs that the firm was making good progress in dealing with outstanding claims. “MyCSP have now cleared all but 422 of these cases and [...] switched available resources to reduce the remaining backlog as quickly as possible,” he said.

Elaborating on those points in a CSW interview conducted just before the general election, Maude said that the previous set-up had left many problems hidden beneath the surface. “You just sort of swallowed it up before, when it was in-house,” he said. “We’ve had an inconsistency with the quality of the data coming over from departments. The accounts for the civil service pension scheme have been qualified for years – we’ve sorted that one – and the HR data from departments is incredibly unreliable. It’s now mostly being cleaned up, but there are still issues there.”

The problems were, Maude added, the result of “a lot of things [being] piled together”. “You’ve got the taking over of the legacy contract. You’ve got the introduction of the Alpha scheme, and the continuing programme in some parts of government of redundancies and voluntary exits, all of which place demands on it.” But, Maude insisted, the overall service had “improved dramatically” since its in-house days.

Ralph Groves, the deputy general secretary of the Civil Service Pensioners’ Alliance, also believes that MyCSP is beginning to get a grip on the situation after a difficult start. His organisation – which campaigns on behalf of retired civil servants and has worked with the administrator and the Cabinet Office to try and help those affected – says an injection of “a load of new staff” seems to have made a difference. “They even temporarily extended their office hours through to Saturday to get rid of the backlog,” he says. As a result, Groves adds, the volume of complaints is “nowhere near as bad as it used to be”. “We were getting calls by the dozen at one stage. It was probably several hundred, if not thousands, prior to the new year. Now we’re down to perhaps ones and twos. So that’s the sheer drop. At one stage we were pulling our own hair out, trying to cope with the call volumes.” 

'Surge in calls'

That’s a view echoed by the company itself, which says that while call waiting times had reached a “clearly unacceptable” 30 minutes at one point, the average wait time now stands at one minute and 24 seconds. A spokesperson for MyCSP told us that, since September, the mutual had taken on more than 250 new employees, doubled the size of its contact centre, and launched a new training programme to ensure staff were properly qualified to handle complex cases. Pressed on why members had experienced delays in the first place, the spokesperson said a “surge in calls” had followed the decision by the Cabinet Office and the previous administrator to write to members telling them about the imminent handover of the payment function to MyCSP.

 “Prior to September, the total call volume per day was circa 2,000 calls,” the spokesperson said. “Just after the migration, this rose to 4,500 calls per day which reflects the impact of the 1.1m letters that awoke the interest of many deferred members of the scheme. MyCSP was expecting a peak of 3,000 calls so this additional volume was difficult to handle overnight and resulted in other members not being able to reach us.” 

On the delays to overseas payments, MyCSP said that while the “vast majority” of pensioners had experienced a “completely smooth migration”, 14,000 members living abroad had not been issued with letters notifying them of the switch to a new payment provider. The mutual told us that, because it did not make early payments to overseas pensioners as had been the case under the previous administrator, some pensioners were now waiting longer for payments than they may have been used to – “one-to-four days before the money reached their accounts”.

The spokesperson added: “The new pensions system implemented by MyCSP has more stringent validation and security checks embedded which does now result in more cases being subjected to additional processing. This can sometimes lead to delays in setting up new pensions as MyCSP is required to verify information with third parties, such as HR departments and shared services providers. These checks are essential to ensure public funds are paid correctly, especially as pensions can be paid for many years.”

'Not uncharted territory'

The FDA’s Naomi Cooke, however, says more could have been done to anticipate the problems MyCSP has faced.

“Some of the problem was inherited, and some of the problem was the inevitable issue of transferring from one provider to another,” she says. “But many areas in the public sector are well aware of what happens when you change contractor and the potential problems that exist. That’s not uncharted territory. So why that should have been such a surprise to the Cabinet Office I’m not sure.”

And while she acknowledges that MyCSP has taken steps to resolve the situation, she believes there is still a way to go.

“The problem for us and the problem for the members is that it’s not enough,” she says. “While things have improved – because they were absolutely terrible about six months ago – there are still problems and this should be resolved by now, to be honest. There have been issues of backlog and so forth, but we still get problems with delayed payments. And that’s the reason for a pension administrator existing – to pay pensions on time.”

“The rest of the world is watching,” the government said in 2012 when MyCSP was launched as a mutual. Now, after a tricky year for the administrator, there’ll be plenty of pensioners, not to mention public sector leaders, keeping a very close eye on what happens next. 

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