My Civil Service Pension (MyCSP) officially began operations on Tuesday 1 May. The part privatised venture – which ministers are keen to align with a John Lewis partnership model – is 25% owned by staff, 35% by the government and 40% by Xafinity Paymaster which will provide "commercial and technical expertise".
The government says the model will increase productivity, contribute to the economy and to tax revenues and save half of the cost of administering civil service pensions by 2022.
But there are criticisms that the "mutual joint venture" tag is just another attempt to privatise more public services. The company’s brief is to try to win new business from the public and private sectors and the government’s retention of a 35% stake is in stark contrast to the privatisations of QinetiQ, the defence laboratories business, and CDC, the fund management arm of the Department for International Development, which were commercial successes but did not benefit the taxpayer.
The new chairman Lord Hutton of MyCSP said at the launch in Whitehall that the old model of public sector monopolies was “not fit for the 21st century”. The Labour lord has held several Cabinet posts, including Secretary of State for Work and Pensions under Tony Blair, and has already conducted a review of public sector pension provision for the Coalition. Critics have suggested that the chairmanship of MyCSP Ltd is Hutton’s reward for supporting government policy.
Meanwhile the 500 public sector workers who have been switched to the new vehicle remain unhappy and maintain they have not been properly consulted. PCS general secretary Mark Serwotka said: "Ministers know that the public do not want more privatisation, so they are using mutuals to shield their true aims. This is privatisation by another name.”
A survey of all MyCSP staff conducted by the union revealed that 95% wanted to retain their civil service status.
Author: Ceri JonesCeri Jones has been writing about pensions for 25 years, first editing Pensions & Employee Benefits magazine and subsequently the FT's Pensions Management magazine in the mid-1980s.