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EPN332 - MYCSP - Change of legal status

Audience: This Notice will be of particular interest to:

  • All users of MyCSP’s services

Action: To note

Timing: From 1 May 2012

MyCSP

  1. EPNs 273 and 312 discussed MyCSP’s change in status from being part of the Civil Service to becoming a private sector body. MyCSP’s change in status will take place as from 1 May 2012. This EPN tells you what will change for you as employers and what will remain the same.
  2. From 1 May you will notice very few changes. The MyCSP colleagues you have been in contact with, the phone numbers and email addresses that you have been using will remain the same (Section 1 of the Employers’ Pension Guide contains some useful contact details). Over time, MyCSP will be transforming the service that they deliver, principally through moving to a new IT platform. SME will keep you informed of these changes through further EPNs which they will use to advise you of any actions that you will need to make.
  3. What will change
    Up to 30 April, MyCSP has delivered pensions administration services for most employers under a Service Level Agreement (SLA) managed by the Scheme Management Executive (SME) in the Cabinet Office. From 1 May a formal legal contract will replace the SLA. The services standards contained in the Contract are in Annex A.
  4. SME will manage the contract on behalf of the Scheme Management Board, which is responsible for the oversight of the Civil Service pension arrangements. See Annex 2c of the Employers’ Pension Guide on the Civil Service pensions website for a diagram showing the relationship between the various parties.
  5. Paying for pension and injury benefit administration services
    The main change for employers will be in how you pay for the services you receive from MyCSP. Employers have been paying for these services essentially in the same way that they did when they had SLAs or a contract in place with the old APACs, before MyCSP was created in April 2010. In future, you should make these payments to the Cabinet Office. The payments will cover all core pension administration and injury benefit work. Employers will no longer have to pay MyCSP directly for pensions administration and injury benefits work. Cabinet Office, rather than MyCSP, will invoice employers for this work. SME will be emailing individually our finance contacts in each employer telling them the amounts that they will have to pay and how to pay them.
  6. The amounts that employers have to pay will depend upon whether your PSC was in the private sector or not. If your Pension Service Centre (PSC) is Paymaster or Capita, your contract will ‘novate’ (which effectively means ‘transfer’) to MyCSP. You will continue to pay the charges contained in that contract. If your PSC is in Newcastle, Cheadle Hulme, Liverpool or Worthing the amount you will pay to the Cabinet Office will reflect that some of your previous charges may have included an element of Civil Service Compensation Scheme (CSCS) work. From vesting day, you will be paying MyCSP directly for CSCS and Bulk Transfer work.
  7. Annex B gives an example illustrating how the amounts have been calculated.
  8. Cabinet Office proposes to invoice employers on a six monthly basis. The first invoices will cover the period 1 April to 30 September. Although MyCSP remained in the public sector within April it seemed easier to move to the new payment method for the whole of the 2012-13 financial year.
  9. At some point to be determined by HM Treasury, it is intended that employers will no longer need to make these payments to the Cabinet Office. The costs of meeting MyCSP’s core work will from that point be met entirely from the central administration charge levied on the employer pension contributions that employers pay to the Cabinet Office already (these employer contributions are usually known as ASLCs or Accruing Superannuation Liability Charges). SME advice is that you should continue to budget for making these payments for the time being.
  10. If you are unsure whether a pensions activity is covered under the Contract, please email SMEemployers@cabinet-office.x.gsi.gov.uk
  11. Paying MyCSP directly
    The Contract covers certain areas of work where you would need to contact MyCSP directly for them to carry out the work for you. The charges that will apply have been agreed as part of the negotiation for the contract between Cabinet Office and MyCSP. The main areas are CSCS and Bulk Transfer work. You will have to pay MyCSP directly for any work that you agree with them that they should do. You will wish to take your own procurement advice about any areas of work that lie outside the contract.
  12. CSCS work and Bulk Transfers
    From 1 May 2012, if you want MyCSP to process CSCS cases or bulk transfers you will need to complete a ‘Statement of Work’. For a copy of the Statement of Work form, see the Guidance for employers’ section of the website under ‘Forms’. Once completed you should send the form to your MyCSP Client Relationship Manager, who will be able to discuss your requirements with you. You will need to articulate clearly your requirements on the form and provide all the necessary information to MyCSP. The form will be the basis of any formal contract that you enter into with MyCSP. On receiving the Statement of Work, MyCSP will respond with a price for the required service.
  13. The contract between the Cabinet Office and MyCSP governs the charges that will apply to CSCS work. Under the contract, the price for an individual to have a quote and an exit award is £80. For just a quote the charge is £36.
  14. Under the contract MyCSP will provide 12 quotes for every 10 exit awards (a ratio of 1·2 to 1) within the £80 unit price. Annex C provides details of how this will work.
  15. If you have a voluntary exit programme currently underway, you should liaise with your MyCSP Customer Relationship Manager.
  16. Bulk Transfers
    Bulk transfers in this context means the transfer in or out of the Civil Service pension arrangements of at least 100 staff. Where you have a bulk transfer of less than 100 staff the cost of the service from MyCSP is included in the core contract price paid by Cabinet Office. The contract between the Cabinet Office and MyCSP sets the price for bulk transfers as follows

    Bulk Transfer In  - £40 per member
    Bulk Transfer Out of Career Average Scheme - £27 per member
    Bulk Transfer Out of Non Career Average Scheme - £64 per member
  17. If you are planning to conduct a Bulk Transfer, you should discuss the way forward with your MyCSP Client relationship Manager.
  18. CSCS and bulk transfers for Employers who held contracts with either Capita or Paymaster
    MyCSP will be writing separately to employers who had in place contracts with Capita or Paymaster on 30 April about the CSCS and Bulk Transfer charges that apply to them.
  19. Payment to MyCSP
    To pay MyCSP, you will need to set their details on your accounting systems – bank account details are as follows:

    Bank: NatWest
    Account Name: MyCSP Limited
    Sort Code: 600001
    Account Number: 39745643

    Please address any questions relating to payment for CSCS work, bulk transfers or other financial questions relating to MyCSP to Graham Barnes on 0114 2098002 or by email to GRAHAM.BARNES@DWP.GSI.GOV.UK
  20. Working with MyCSP
    As mentioned above, much will remain the same as before on a day to day basis. However, you will need to bear in mind that the relationship with MyCSP is no longer one public sector organisation dealing with another one. MyCSP is a commercial business. If they have to do work beyond the terms of the contract, they will charge for it. This is one of a number of reasons why it is imperative that you give MyCSP correct data. SME has issued new Participation Agreements (see Section 2, Annex 2B of the EPG on the website) to all employers which reiterate the need for you to provide correct data to MyCSP. Your Accounting Officer has to certify at the end of the Financial Year that your organisation has met this requirement.
  21. Disputes with MyCSP
    We will all hope that things run smoothly under the new contract to the benefit of all concerned. Problems do occur, however, and if you have a disagreement or dispute with MyCSP then you should look to resolve it in discussion with your Client Relationship Manager. If you still cannot resolve the dispute, you can refer it to SME at SMEemployers@cabinet-office.x.gsi.gov.uk
  22. Employers’ Pension Guide (EPG)
    The EPG is a key source of information for employers. SME, together with MyCSP has substantially updated it and the revised sections are here.
  23. The EPG is a living document and we will be aiming to update it regularly. If you browse it and cannot find what you are looking for, or have any comments on its contents or formatting, please do let us know on SMEemployers@cabinet-office.x.gsi.gov.uk
  24. New Scheme Logo
    Last but not least you will see the updated version of scheme logo. This will feature on Scheme communications with members going forwards. MyCSP will use the logo on letters going to scheme members. They will also revise, on an ongoing basis, all scheme publications and products.

Contacts

Enquiries regarding content please refer to Scheme Management Executive SMEemployers@cabinet-office.x.gsi.gov.uk

Annex A

Core Services provided by MyCSP under the Contract

Please note: Annex A was issued as a separate PDF document with this EPN. It will not be published on the Civil Service or MyCSP websites. If you need a copy of the document please email Mycsp.basingstoke@dwp.gsi.gov.uk.

Annex B

Example of how employer charges and payments to the Cabinet Office are calculated

Dept X has paid MyCSP £540,000 per annum in previous years.

In 08/09 and 09/10 it had 250 and 180 exits respectively.

The average number of exits, therefore is 215.

The value of these exits is 215 x £80 = £17,200

Revised base for core pension administration services is
£540,000 - £17,200 = £522,800

Dept X will therefore need to pay Cabinet Office £522,800 as a contribution for the core pension administration service.

A proportionate amount will be charged if, during the year, Treasury decide that all core pension administration services should be funded through the ASLC process.

Any questions relating to Cabinet Office collecting the funds for core pension administration services should be addressed to:

Payments process
cardiff.arteam@dwp.gsi.gov.uk

Other finance queries
SMEemployers@cabinet-office.x.gsi.gov.uk

Annex C

CSCS Quotes

Dept Y requests 115 quotes for 100 planned exits.
This falls within the 1·2 to 1 quotes to exit ratio, so the price will be 100 x £80 = £8,000

Dept Z requests 320 quotes for 50 exits.
Using the 1·2 to 1 ratio, for the 50 exits, 60 quotes are covered by the £80 unit price. The remaining quotes are charged at £36 per quote.
So the total price is
(60 x £80) + (260 x £36) = £14,160

Dept P requests 200 quotes in May for workforce planning purposes.

The price will be 200 x £36 = £7,200
The following January, Dept P is ready to run an exit exercise and requests 120 quotes and awards. The price will be

120 x £80 = £9,600.

The purpose of this arrangement is to drive good behaviours from employers, whilst recognising the work undertaken in MyCSP Ltd. Employers can keep their costs down by keeping the amount of quotes to exits within the 1·2 ratio.

Should an employer wish MyCSP to support workforce planning, MyCSP Ltd is in a position to do so.

For further information, please contact your MyCSP Client Relationship Manager.