The switchover of the teachers’ pension scheme from Capita to Tata Consultancy Services (TCS), which begins this week, will be closely watched as government faces decision time over Capita’s failed civil service pension administration.
If all goes to plan, a blackout on the teachers’ pension website is planned from 22 October to 2 November, when the scheme completes its transfer to Indian IT giant TCS.
Capita has run the service for more than 20 years, but TCS secured a 10-year Department for Education contract in 2023, the same year Capita won the contract to take over the civil service pension scheme (CSPS), which since its go live has been a monumental disaster (see box below).
It won’t just be teachers braced for the transfer of more than two million pension accounts from Capita to TCS, but also the government, which is under pressure to strip Capita of the CSPS. It has already removed the outsourcing firm from the contract to administer the Royal Mail pension scheme, following failure to meet key milestones, and is still to decide the scheme’s future administration delivery.
Pension problems
As Computer Weekly revealed earlier this month, MPs heard that some teachers are experiencing problems with their pensions. In light of Capita’s disastrous takeover of the Civil Service Pension Scheme, a Westminster Hall debate was held, where MPs discussed the botched scheme.
During the packed-out meeting, Alison Bennet, Liberal Democrat MP for Mid Sussex, said she had been told teachers were experiencing problems with their pensions. She asked: “Are we seeing teachers go through the same ordeal [as civil servants]?
“I have received very concerning casework from teachers in my constituency who seem to be having similar or the same troubles with their pensions,” added Bennet. “The idea that the immense stress and potential financial hardship we’ve heard inflicted on civil servants has been [repeated] with teachers is appalling.”
One former teacher who is supporting teachers with concerns told Computer Weekly earlier this month that there are thousands of anomalies in the data being transferred that could see teachers lose out. “I have been encouraging teachers to make copies of the data that they have available through the website,” he said.
A Department for Education spokesperson repeated an earlier statement that the scheme has some “clearly unacceptable” delays. The spokesperson said it expects Capita to “closely with those affected … resolve issues as quickly as possible and keep them informed throughout”.
The government department confirmed the transfer will be complete on 1 November, with the website and member/employer portal available from 2 November.
TCS and Capita were contacted for an update on progress but had not responded when this article was published.
Decision time
The government is currently deciding what to do with the CSPS and Royal Mail schemes. It’s Strategic Review of Pension Scheme Delivery is at its “discovery phase”, where it is considering a range of options, including insourcing and increased digital delivery for the schemes.
In a recent briefing to members, PCS general secretary Fran Heathcote said the government hopes to develop its “strategic position” by next month. A decision, if made next month, will come soon after TCS’s teachers’ pension administration goes live.
Heathcote told union members that the government is considering the “feasibility of insourcing pension administration”, as well as “greater consistency and alignment across public service schemes, shared delivery approaches between schemes, future digital delivery options, and the practical implications of major organisational change”.
The PCS’s Heathcote also said the National Trade Union Congress has highlighted government ambitions to strengthen internal digital capability and said the review should examine: “The feasibility of an in-house digital pension platform. The timescales required to develop such a system. Alternative suppliers if an internal solution is not viable.”
TCS’s takeover of the teachers’ pension scheme, which involves digitally transforming it, will give the government a live case to watch closely.
Botched AI project
Capita had planned a similar transformation with the CSPS but its grand plan to use artificial intelligence (AI) to revolutionise pension scheme delivery failed when the tech didn’t work.
Simon Hoare MP, who chairs the Public Administration and Constitutional Affairs Committee, said during a select committee hearing about the CSPS failures: “The Cabinet Office was told that the two-year transition period would lead to the digital artificial intelligence revolution to deliver a world-class, world-leading pension service. None of that met neither the novel nor the basic.”
Capita CEO Adolfo Hernandez conceded: “We have not been able to deploy the technology that would allow us to get there.”
What resulted is becoming a scandal as retired civil servants and the families of deceased scheme members have been left without the funds they are owed – for nearly a year in some cases – due to Capta’s mistakes.
