The Public Accounts Committee (PAC) has criticised the government’s handling of the Civil Service Pension Scheme (CSPS), describing “successive failures” in its administration and warning that the system remains at risk as responsibility transitions from MyCSP to Capita.

In its latest report, Administration of the Civil Service Pension Scheme, the committee concluded that poor contract management, under-resourcing, and repeated transition failures have left scheme members facing long waits, poor customer service, and uncertainty over the delivery of key reforms.

The CSPS, which covers 1.7 million current and former civil servants and carries total liabilities of £189bn, has been administered by MyCSP since 2012 under a contract worth £238m since 2016.

Capita was awarded the new £239m, seven-year contract in late 2023 and is due to take over complete administration of the scheme in December 2025.

However, the PAC found “unacceptable” levels of service in recent years, with call waiting times averaging 24 minutes in late 2024 and only 8 per cent of calls answered within 30 seconds in January 2025, compared with a target of 80 per cent.

In addition, complaints have reached their highest level since 2016/17, and staff turnover at MyCSP doubled after the award of the new contract, rising from 12 per cent to 24 per cent within a year.

The committee also found that Capita plans to run the scheme with fewer staff than MyCSP - 33 fewer in its first year - while missing several milestones on its IT system build.

Indeed, of the eight transition milestones due so far, only one has been met in full and on time.

The Cabinet Office has already withheld £9.6m in payments to Capita due to delays, and the two organisations have agreed to launch a “simplified IT solution” in December 2025 to de-risk delivery, with further functionality expected by March 2026.

With this in mind, the PAC warned of a “clear risk” that Capita would not be ready to take over on the planned date, urging the Cabinet Office to develop contingency plans fully and to report back immediately after its “go/no-go” decision on the transition.

Responding to the findings, however, a Capita spokesperson said: "This report presents a snapshot from several months ago and is not reflective of the current status of the transition. 

"Capita is preparing to take on the administration of the CSPS from 1 December 2025, working with the Cabinet Office to support a successful transition.

"We are proud to have been selected to deliver such a vital service, supporting over 1.5 million current and former public servants."

Meanwhile, the report also expressed concern over the long-running McCloud Remedy process, which aims to correct age discrimination identified in the 2015 public service pension reforms.

As of July 2025, 53 per cent of affected CSPS pensioners - more than 68,000 people - were still waiting to receive their remedial service statements, which set out their pension choices.

The Cabinet Office has said it aims to contact all affected members by 2027, but currently has no chosen supplier to complete the remaining work.

The committee stated it was “unacceptable” that some members would have to wait up to six years to receive information about their entitlements.

It called for a detailed plan for when and how members will be contacted and urged clearer communication about expected timelines.

In response, a MyCSP spokesperson said: “MyCSP has maintained consistently high service levels throughout the CSPS contract, thanks to the hard work and dedication of our teams.

"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.”

However, PAC chair, Sir Geoffrey Clifton-Brown MP, said it was “deeply frustrating” for the committee to be scrutinising an issue that ought to be as "seamlessly run" as civil service pensions.

“Scheme members who have dedicated their careers to public service ought to be secure in the knowledge that it is under sound administration,” he stressed.

“For members to be kept waiting years for age-related discrimination to be remedied; for the Cabinet Office to successively fail in its management of the contract for the scheme as it shuttles between suppliers - this is an indictment of a system that should be invisibly run for the benefit of public servants who deserve security following their retirement.”

He added that the report “provoked wider questions” about the way public money is spent and the accountability of private suppliers, noting concerns about MyCSP’s historic lack of union recognition and recent industrial unrest.

The committee welcomed confirmation that Capita has agreed to move towards recognising the PCS union following strikes at MyCSP earlier this year, but said the situation raised broader issues about employee voice and governance within outsourced public service contracts.

“There may be structural reasons for the lack of union recognition by MyCSP,” Clifton-Brown said.

“However, it will seem odd to many that the civil service pension scheme administrator did not recognise the civil service’s largest union.”

The report also noted that MyCSP had been fined just twice by the Cabinet Office - a total of £260,000 over a £238m contract period, despite repeated failures to meet performance standards.

It urged the government to strengthen its commercial capacity and ensure more robust oversight of outsourced pension contracts, noting that the small number of large suppliers in the market could limit future competition and value for money.

“The costs and benefits of bringing the scheme back in-house must now be laid out,” Clifton-Brown argued.

“Whatever route is taken in the future, the status quo has long clearly not been good enough.”

The Cabinet Office has been asked to respond to all of the PAC’s recommendations in its next Treasury Minute, setting out how it intends to ensure sufficient resourcing, improve member communication, and safeguard service quality during the transition.

It told the committee that it was currently reviewing the wider market for pension administration, exploring how to encourage new entrants, and considering the potential value of insourcing in the future.

The Cabinet Office did not respond to a request for comment.

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