Government to outsource Royal Mail pensions admin in 31m deal

[TrueBlueTerrier]

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The Royal Mail’s nationalised pension will soon be run by an outside private company, with the Government set to pay £31m to the winner of the contest to manage the scheme.

The pension, which has 402,000 members, was controversially brought onto the public sector balance sheet shortly before the postal service was privatised three years ago.

The Government is now inviting private companies to bid for the right to administer pensions to these members. The winning bidder will begin to take over in March from the Royal Mail Pension Service Centre, an offshoot of Royal Mail overseen by the Cabinet Office that is responsible for paying out almost £1.5bn a year to retirees.

According to the tender document posted online, the winning company will operate the helpline for members and issue all paperwork, as well as working together with Royal Mail’s new private sector pension scheme.

The winning provider will be expected to spend money on technology upgrades “with a view to improving service and driving long-term efficiencies in the cost base”.

The Cabinet Office has also asked bidders to set out how they could also take over as manager for Royal Mail’s private sector pension, which was established to pay for benefits earned after 2012.

The two schemes are currently administered by Royal Mail’s internal pension service centre, which employs more than 100 people.

Many postal workers have savings with both schemes, and the Government hopes to save money and minimise bureaucracy by keeping the two pensions under one roof.

[nataddick]

Absolutely inevitable that this would happen. My father in law is ex MOD and his pension has been paid by Capita for a number of years ! Interesting that the bidders are tendering to administer both the Statutory Pension Plan and current RMPP - cost savings at Chesterfield to follow.