Question to the Cabinet Office:

To ask the Minister for the Cabinet Office, what assessment he has made of the adequacy of the recovery plan for Civil Servants Pension Scheme.

The Cabinet Office awarded Capita the contract to administer the Civil Service Pension Scheme (CSPS) in November 2023 under the previous government. The current delays facing scheme members are entirely unacceptable, and the Government continues to hold Capita to account for delivery of the service, applying all contractual levers. This includes withholding £9.9 million in contract payments for undelivered milestones. We intend to seek to recover all the Government’s delay-related costs, and that Capita bear the costs of their failure, not the taxpayer.

Ministers have been clear that Capita’s performance has fallen short of acceptable standards, which is why urgent intervention has been taken; including mandating production of a formal service rectification plan.

Independent auditors have been deployed to conduct a technical systems review, and an on-the-ground Remedial Adviser has been appointed at Capita’s expense, to determine the effectiveness of these measures and test the validity and deliverability of Capita’s formal contract Rectification Plan. An update on this will be provided to Parliament in October.

Further commercial, legal, and operational options remain on the table, and work is continuing on actively shaping a long-term strategy to bring this pension scheme back in-house.

The Government is committed to transparency regarding operational recovery. Priority is being directed towards high-impact and vulnerable cases - specifically bereavement, death-in-service, and ill-health retirement awards - to clear backlogs, stabilise operational workflows, and return performance across all categories. Cabinet Office closely monitors Capita’s delivery of the CSPS, and to improve performance, the Cabinet Office have set up daily performance meetings with Capita to ensure that they are prioritising the most vulnerable and urgent cases alongside administering the wider pensions scheme. While Capita reported meeting its 1st September milestone on workable stock across priority operational areas, overall performance remains unacceptable and does not constitute full service recovery.

To specifically prioritise cases where members are facing hardship, the Department has taken the following direct steps:

• Health Circumstances: All outstanding ill-health retirement and death-in-service cases have been placed under strict, individual 'hypercare' tracking. We have deployed a cross-government surge team of over 140 civil servants, alongside experts from the Government Actuary’s Department, to bypass standard queues and directly clear the oldest and most complex cases.

• Financial Hardship: To provide immediate financial support to those who may need it, including those who have left under the compensation scheme, arrangements are in place for interest-free bridging loans of £5,000 and up to £20,000 in exceptional cases - to most recent retirees facing payment delays. This is alongside interim lump sum payments being made to provide immediate funds to retiring members.

• Other Exceptional Circumstances: These are considered for prioritisation and ‘hypercare’ tracking on a case-by-case basis.

We have also established dedicated virtual surgeries for MPs and caseworkers to escalate urgent and exceptional cases directly with a Capita caseworker.

The CSPS is implementing a temporary process to pay interest on benefits paid more than one month after a member’s retirement date. This applies for those who receive retirement payments after 1 December 2025, and interest will be calculated at the Bank of England base rate plus 1%. Capita will automatically calculate the interest owed, there is no need for members to apply.

Regular updates on the work to recover the service, continue to be posted on the Civil Service Pensions member portal and on GOV.UK.