Lessons from the Northern Ireland Civil Service Pension Scheme

PCS existing and retired members are, understandably, annoyed, horrified, and appalled by the level of service provided by the UK Civil Service Pension Administration and the huge private sector firm Capita. Members will know of colleagues, or indeed have experienced directly themselves, the long waiting times to get telephone calls answered, excessive delays in receiving pension estimates, or even the complete failure to receive lump-sum payments or pension entitlements on time.

While the Cabinet Office and the government have both expressed how utterly unacceptable the current level of service is, they have merely tried to patch up the symptoms. As we all know, Angela MacDonald, a permanent secretary, and hundreds of civil servants have been deployed to bail out Capita to try to achieve the level of service the company claimed it could meet in its successful bid for the contract, which led to it being awarded large sums of public money. We can all hope that the cost of Capita being bailed out by civil servants will be refunded to the taxpayer.

Assisting Capita to provide the adequate level of service for which it is contracted is important, but it is not the only thing the government should be considering. Bringing the pension administration back in-house is a key demand of the PCS, which has lobbied individual Labour MPs and the government, as well as directly lobbying the recent Capita AGM.

A working model for an in-house Civil Service Pension Administration is not too far away; it already exists in Northern Ireland.

Unlike the devolved government administrations in Scotland and Wales, which remain part of the UK Civil Service Pension Scheme (UKCS PS) alongside England, Northern Ireland has had its entirely separate Northern Ireland Civil Service (NICS) with its own NICS Pension Scheme (NICS PS) since its creation in 1921. This applies to all civil servants employed by devolved government departments such as agriculture, economy, finance, and communities. There are civil servants in Northern Ireland who are in the UKCS PS, but these are employees of UK-wide bodies like HMRC, the Passport Office, the Northern Ireland Office, and the MoD.

In the Northern Ireland context, the vast majority belong to the NICS PS, which currently has 34,195 civil service pensioners. The NICS PS is administered entirely by civil servants within the Civil Service Pensions Branch of the Department of Finance. They are based in Northern Ireland’s second city, Derry/Londonderry. They operate with a pensions board, chaired by an independent chair, with equal representation from the Department of Finance and trade unions.

Although the NICS uses Capita’s software for its pension administration and payroll systems, all the actual processing and administration of the Northern Ireland Civil Service Pension Scheme is carried out in-house. All services have continued to operate as normal, completely unaffected by the crisis in the UKCS PS administered by Capita.

The NICS PS provides the full range of pension administration, including online portals, digital newsletters, annual benefit statements, and pension savings statements. They also provide pension information sessions and run a complaints and appeals procedure that allows for internal dispute resolution.

While the NICS PS is numerically smaller than the UKCS PS, the principle of how it is administered is the crucial point. Once that principle is accepted, a UK-wide system can be staffed accordingly.

Currently, no Northern Ireland civil servant is retiring without their pension quote, nor has anyone failed to receive either their lump sum or pension on the due date.

As the secretary of the Northern Ireland Branch of the Civil Service Pensioners’ Alliance, I would strongly recommend that the Cabinet Office, the Treasury, and the government as a whole look at the efficiency of our scheme and the dedication of our staff at all levels. They have produced a system that works for Northern Ireland civil service pensioners and works for the taxpayer.

Northern Ireland civil servants do not need to be driven by a profit motive, just the traditional public service ethos.

No one can realistically compare the outsourced UKCS PS with the in-house administration provided by the NICS PS and fail to see that one has outcomes vastly superior to the other. Let us hope the government does not fail to learn the lessons staring them in the face.