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Spending watchdogs are content. MyCSP, the coalition's first ‘spin-out' mutual, which manages pensions for 1.5m civil servants, is on track to make forecast savings of 25% by 2020. A National Audit Office (NAO) study issued last week found poor initial planning and the complexity of the arrangements meant it took the Cabinet Office longer to finalise the deal than was first envisaged. Poor governance arrangements in preparing for the transaction, combined with an overly optimistic budget model and timetable, held back the creation of the first civil service mutual. Establishing this model involved selling 40% of the organisation to a private pensions provider, giving a 25% stake to staff, with the Government retaining a 35% holding share in the body. Under new arrangements, MyCSP – which paid out £4.9bn to civil service pension scheme members between 2011 and 2012 – expects to reduce administrative costs by a quarter to £13 per member. Amyas Morse, head of the NAO, said auditors accepted there was ‘significant value in the MyCSP deal for the Cabinet Office and for scheme members'. ‘But given the challenges and the imminent pension changes in 2015, Government will have to remain actively engaged as a customer, shareholder and supplier to capture the full benefits of this deal and to ensure the risks do not revert back to Government,' added Mr Morse.

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FINANCE

Mutual pensions deal to hit savings target

By Jonathan Werran | 18 September 2013

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