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EPN312 - Impact on employers of MyCSP becoming a Mutual Joint Venture

Audience: 

  • HR Directors
  • HR Managers
  • Finance Directors

Action: To note changes connected with the mutualisation of MyCSP

Timing: The new arrangements will come into effect on the same date as MyCSP becomes a mutual joint venture in Spring 2012 This notice is from Cabinet Office, Scheme Management Executive.

  1. MyCSP, who administers the Civil Service pension arrangements, is going to become part of a Mutual Joint Venture (MJV) in Spring 2012.
  2. As a MJV, MyCSP will have a private sector partner and become a private sector company. The government, the MyCSP staff and the private sector partner will all be shareholders of the new company.
  3. On the same day the MJV comes into being, the current service level agreement between the Scheme Management Executive (SME) and MyCSP will come to an end. In its place, the Cabinet Office will enter into a formal contract with MyCSP Ltd. SME will manage this contract on behalf of all employers who participate in the Civil Service pension arrangements. This includes employers who currently have a contract with one of the private sector PSCs (Xafinity Paymaster and Capita),whose contracts will novate to MyCSP Ltd, again on the same day. SME understands that all affected employers have been contacted about this.
  4. Contract negotiations between the Cabinet Office, and MyCSP are ongoing. The contract will cover the service that MyCSP must provide from the first day it comes into operation, and their obligations to transform the service, supported by the introduction of new administration software. It will run for between 7 and 10 years.

What will change

  1. Once the transformation is complete, MyCSP intend to have made improvements in many areas of the current service. But on the day the contract comes into effect, most employers will notice few changes as far as pension administration is concerned. Employers will still have the same Pension Service Centre, and they will still have the same responsibilities for giving MyCSP correct data, for paying the correct contributions to the Cabinet Office and so on.
  2. The current funding arrangements for pension services will remain in place until further notice. Employers currently pay for scheme administration in two ways. First, they make a direct payment to MyCSP, in the same way they formerly did to their APAC. As from the date the MJV comes into effect, employers will pay this money to the Cabinet Office instead, who will in turn pay MyCSP’s charges. The Cabinet Office is currently developing the processes for setting and collecting the payments from employers, and will contact you separately when this task is complete.
  3. Secondly, a small charge is levied on employer pension contributions to pay for central administration and management charges, historically covering items such as the Capita payroll contract and the scheme administration software.
  4. In due course, at a time to be determined by HM Treasury, employers will no longer need to make the direct payment to MyCSP. SME will tell employers when this will come into effect. The cost of all pension service charges will, following HM Treasury’s decision, be met from the charge levied on employer contributions. In the meantime, employers should plan future budgeting on the basis of their current level of expenditure.
  5. The principal area of change from the establishment of the MJV concerns the Civil Service Compensation Scheme (CSCS), due to the volume of work involved at present and the impact that this has on MyCSP’s costs and resource requirements. At present, the way that employers pay for the administration of the CSCS varies greatly across the employers covered by the scheme. Under the new contract, employers will contract directly with MyCSP for all CSCS cases. MyCSP will charge employers directly for the service they will provide in accordance with the provisions of the main contract that MyCSP will have with the Cabinet Office. The amount employers pay will relate directly to the number of quotes they ask for and the number of staff who actually leave. Employers who wish to run exit schemes should, at as early a stage as possible contact their MyCSP Client relationship manager in the same way they do now to discuss and commission the work required.
  6. SME will keep this revised process under review. If it becomes clear that it would be more efficient to meet costs through the central administration charge, then SME will look to negotiate this change with MyCSP. This approach may become more appropriate when the numbers of staff leaving under the CSCS returns to more normal and predictable levels. In any event, SME will review the process at the end of the Current Spending Review.

Employer Participation Agreements

  1. Employers covered by the Civil Service pension arrangements all currently have a signed Participation Agreement in place with SME. As the contract comes into force, SME will issue new Participation Agreements for employers to sign. The revised agreements will restate the employers’ responsibilities and explain the service levels that they can expect to receive from MyCSP.
  2. The Participation Agreements will also cover contact with MyCSP. Day-to-day contacts should remain as they are now. MyCSP will maintain the network of Client Relationship Managers. Employers should address any issues regarding service with the Client Relationship Managers in the first instance. If the employer still has concerns after discussions with their Client relationship Manager, they should then contact SME on the following:

SMEemployers@cabinet-office.x.gsi.gov.uk
01256 846123

Outstanding MyCSP charges for period up to signing of the contract

  1. In the current year, many employers have continued to pay MyCSP in the same way that they have done in the past. However some employers have not yet paid for these services. MyCSP has recently written to all employers to resolve any outstanding payments (copy at Annex A). MyCSP’s letter also covered CSCS casework. In both cases, it is important that any outstanding issues are resolved before the new contract comes into place.
  2. The Cabinet Office’s Executive Director of Civil Service Workforce Reform is writing in similar terms to HR and Finance Directors.

Contacts

Enquiries regarding distribution or to receive in a different format

Mycsp.basingstoke@dwp.gsi.gov.uk