The administration of the Civil Service Pension Scheme (CSPS) has reached a “crisis point” and could be at risk of collapse, the Public and Commercial Services Union (PCS) has warned, calling for the scheme’s administration to be brought back in-house.

PCS said the scheme should no longer be run by private firms but instead should be handled once again by civil servants under direct Cabinet Office management.

In response to the PCS’s warning, a Cabinet Office spokesperson said: “All services must represent value for money and deliver. The Cabinet Office recently re-procured the CSPS administration and estimates it will save £83m through innovation and automation over the life of the contract.”

The call comes after a recent report from the National Audit Office (NAO) criticised the scheme’s current pension administrator, MyCSP, for “poor performance” and said the Cabinet Office had failed to hold the provider accountable or drive improvements through its contract.

In response, a MyCSP spokesperson said: “MyCSP has delivered consistently high service levels throughout the CSPS contract, including over the last five weeks, thanks to the hard work and dedication of our employee partners.

"We are proud to have served Civil Service members over the last 13 years and remain fully focused on delivering the best possible and safest administration service during the transition period.”

The Cabinet Office is currently preparing to switch administration to Capita Pension Solutions in December, but MPs at a recent Public Accounts Committee (PAC) hearing raised concerns about this transition.

At the PAC hearing on 7 July, Cabinet Office permanent secretary, Cat Little, confirmed that only one of 12 scheduled milestones has been delivered on time by Capita, with eight currently due.

As of 10 June 2025, one milestone had been delivered and signed off, one had been partially delivered, three were due to be delivered between 30 June and 30 November 2025 and were reported to be currently on course.

“Obviously, we are disappointed that a number of those milestones were late...Capita has probably underestimated some of the complexity of the transition, and the technology has taken longer to implement,” Little said.

"The fact that we are so behind on a number of these deliverables does give us quite significant cause for concern."

However, she clarified that, for the whole milestone to be achieved, a "huge" amount of activity has to be undertaken, warning that this "probably belies" how much work has actually happened.

Capita also confirmed that the three delayed milestones referenced in the June NAO report, reflecting the status of the transition as of May 2025, have since been met.

In addition to this, Little said that officials are working “very closely” with Capita on how quickly it can get a new delivery plan with realistic deadlines in place.

Little also confirmed that "robust" contingency plans are in place to keep MyCSP running the scheme if Capita is not ready by December, with the final decision on whether to proceed with the transition expected in September.

“If we are not ready to make that transition, we will not make that transition. We will go to our contingency plans,” she said. “In the worst case, the scheme will continue as it is today.

"I am very happy to commit to scheme members that we are going to do everything we can to maintain current service provision."

Commenting in response to these comments, a Capita spokesperson added: "Capita is proud to be working in partnership with the Cabinet Office to modernise the administration of the CSPS from December 2025, and we are on track to deliver enhanced, innovative services, and tailored experiences for members for when the contract starts."

However, PCS general secretary, Fran Heathcote, has since written to Little arguing that the risk to payment of pensions and access to information is “unacceptable”, and reiterated the union’s call for the administration to be brought fully back under the direct management of the Cabinet Office.

Alongside other unions, PCS is also pushing for assurances from the Cabinet Office that there will be no disruption to the scheme’s online pension portal and that McCloud Remedy calculations for retired members will resume as soon as possible.

PCS confirmed that the current situation has prompted further talks between unions and the Government People Group this week, with further updates to be shared when possible.

Meanwhile, PCS members working at MyCSP are currently in a six-week strike, calling for union recognition and the protection of their terms and conditions ahead of the planned transfer to Capita.

The strike was prompted by MyCSP’s refusal to engage with PCS, opting instead to use an “inexperienced employee forum” to handle the complex transfer process of the terms and conditions.

However, PCS received a letter from Capita at the end of July confirming that discussions on union recognition would begin in early August.

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