Government signs over civil service pensions to private-sector mutual

The pensions of 1.5 million civil servants will be managed as a collective investment with the government retaining liability

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• Nicholas Watt
• The Guardian, Tuesday 12 April 2011
• Article history

The government is handing over responsibility for 1.5 million civil servants' pensions to a private sector mutual. Photograph: Martin Argles for the Guardian
The pension scheme for 1.5 million civil servants in Britain is to be run by a new joint venture in the biggest "spin-out" of a government service under plans to devolve power. Francis Maude, the cabinet office minister, will announce that handing My Civil Service Pension (MyCSP) to a mutual shows that the government is ending the days of a "binary choice" between central state provision of a service and outsourcing. The new mutual, a professionally managed form of collective investments, will be a joint venture between MyCSP's 400 staff and a private sector partner. The mutual will take over the administration of pensions for most of Britain's civil servants. The government will continue to assume the liability for the pensions. Maude will say: "Too often there's been a binary choice between the government providing a service itself, or outsourcing it to the private sector. These choices have historically been driven by a belief that services have to be controlled centrally – with a one-size-fits all approach that has left little room for innovation. "We are looking for more innovative ways to structure services. We know that employees who have a stake in their business, or take ownership of it completely, have more power and motivation to improve the service they run. They can also benefit from partnerships with private or voluntary sector organisations which can bring in capital and expertise. "For the private sector, which can no longer expect the generous margins of the past, tapping the talent of frontline staff to improve efficiency will be a priority. The state, too, can keep a stake so that taxpayers benefit from the rising value of an improved service. "I'm impressed with entrepreneurial zeal of Phil Bartlett and his team at My Civil Service Pension. They are pioneering the mutual joint venture model, and the government is committed to ensuring they have they right support to succeed." Phil Bartlett, chief executive of My Civil Service Pension, said: "At MyCSP we are proud to be the first pension administration service to pioneer an innovative mutual joint venture between the government, employees and a new private sector partner. By taking the opportunity to mutualise, we can better acknowledge our people and their expertise – and access valuable additional resources and expertise in the private sector. This new and innovative structure will give us the agility to exploit opportunities in the changing pension landscape and grow our business, and the taxpayer will benefit from the increased value of an improved and more efficient service."