Pension Scheme Concerns 2

Setting-out our concerns and calling for action

PCS and other unions are receiving a rapidly growing number of cases, involving significant delays in the payment of pensions, lump sums, and first pension payments. Many of these cases involve members who are already entitled to payments, which have not yet been made, creating hardship that requires urgent intervention. Although these cases are being escalated to Capita’s designated contact, we believe the volume of issues is preventing a timely and consistent resolution.

Backlog and Prioritisation

Capita has inherited a backlog of c.90,000 cases from the previous contractor, MyCSP/Equiniti. At our most recent meeting, the Cabinet Office told unions that priority would be given to “exits,” but it remains unclear whether this refers to: 

• The 36 separate Voluntary Exit Schemes (VES) currently underway, or

• All staff leaving the service.

Given this ambiguity, we have written to the Cabinet Office, setting out our demands for the steps the Cabinet Office and Capita should take, and how they should prioritise working through the massive backlogs.

Union Expectations and Required Clarification

In the letter to the Cabinet Office, we have set out that we require the following:

Resourcing and Timeline

In order to give us the necessary confidence that the current problems are being addressed, we have called for:

• A clear explanation of the resources Capita is dedicating to clearing the backlog.

• A firm estimate - agreed by both Capita and the Cabinet Office - of how long the backlog will take to resolve.

• An explicit deadline for clearing the backlog to ensure service improvements materialise as promised.

Performance Data

We have also asked the Cabinet Office to provide high-level management information on pension and lump-sum payment performance for the past 12 months; along with evidence supporting previous assurances that Key Performance Indicators (KPIs) have been met, given the scale of current delays.

Prioritisation of Casework

If Capita must prioritise cases due to the backlog pressures, we have made it clear that we believe the following categories must be given priority:

Hardship cases

• Including retired, partially retired, and any other former staff awaiting payment.

• Additionally, where full payment cannot be made immediately, members should be offered a bridging payment.

• Imminent retirements or partial retirements

• Bereavement cases, including changes to beneficiaries.

Unions do not believe that VES quotes or VES scheme completion should take precedence over these categories. While acknowledging the scale of VES activity (36 schemes are underway and around 5,000 exits are planned by March 2026), we have argued the fact that VES participants remain in employment and can continue in employment with the relevant department or associated employers if necessary; thereby avoiding any financial hardship.

Compensation and Redress

Currently, interest is not paid on overdue payments, which we argue is untenable, given there have been delays of up to 9 months. We have argued that to avoid forcing members into individual Internal Dispute Resolution Procedure complaints, the Cabinet Office should establish a proactive compensation scheme for serious delays, to provide compensation for: 

Distress and inconvenience

Interest on overdue payments

• Any other additional costs incurred by members.

We have also reminded the Cabinet Office that we have reserved the right to explore supporting members in pursuing legal action for financial restitution, where payments have been withheld or interest lost.

Summary and Deadline

We have written to the Cabinet Office, calling for:

• Urgent clarification on resourcing

• A firm timeline for clearing the backlog

• Confirmation that Capita will prioritise work in line with the our approach

• The development of a proactive compensation scheme for serious delays.

We have made it clear that if there is any failure to meet our demands, then we will not rule out pressing our case through the PCS parliamentary group of MPs; and we will consider all legal challenges that may be available to us - both on an individual and collective basis. We have given the Cabinet Office a response deadline of close of business on Friday 16 January 2026.