Firms clamour to run pensions agency

Martyn Cornell

Martyn Cornell on the Government's controversial contracting-out plan.

At least 16 private companies have told the Department for Education and Employment they would be interested in administering the Teachers' Pensions Agency when it is sold off.

A shortlist of companies to be invited to tender for the contract to administer the TPA will be drawn up by the DFEE from the 16 firms that filled in a questionnaire seeking to gauge their suitability for running the TPA. Questionnaires have to be in by this Monday, September 18, and the tender list is expected to be made public within the next couple of months.

The TPA, which was set up in 1992 and employs 350 people at its headquarters in Darlington, organises the Teachers' Superannuation Scheme on behalf of 1.1 million teachers. The investment side of the TSS will remain in public hands, under the Government's plans for the "contractualisation" of the agency.

However, after a report commissioned by the Government from the accountancy company KPMG Peat Marwick, the DFEE announced it was looking to bring in a private company to run the administration of the TPA.

The teachers' unions have put in a submission to the DFEE opposing the plan to contract out administration of the TPA. They are due to meet on September 19 to plan the next stage in their campaign to try to keep all aspects of the agency in public hands. Barry Fawcett, assistant general secretary of the National Union of Teachers, said that "subject to decision", action is likely to include a leaflet campaign to all teachers encouraging them to press their MPs to oppose hiving off the TPA's administration.

One fear is that the files of the TPA could be used by a private company to try to sell teachers other financial services. Mr Fawcett said: "The TPA holds a lot of sensitive information on teachers. A spokesman for the DFEEsaid: "Ministers have made it clear they will let the administration of the TPA be contracted out only if that will provide better value for money than if it were kept in the public sector.

"At the moment the TPA is a service-orientated organisation. If it is being run by a private company, their prime motive will be to make a profit. The consequence of the contractualisation of the TPA will be a reduction in the standards of service that our members are getting."

Civil Service unions at the TPA in Darlington are worried that, together with the merger of the Department of Employment with the Department for Education, any privatisation of the TPA is likely to increase the possibility of redundancies. Matthew Gleaves, a trade union spokesman at Darlington, said: "There is already a lot of unemployment in this area. If the TPA leaves, it will lose jobs for the town."

One likely bidder for the contract to run the administration of the agency is UPS International, a specialist pension fund company with clients such as the Civil Aviation Authority and the House of Commons pension funds.

When proposals were first revealed to privatise part of the TPA, the managing director of UPS, Ken Edis, said that teachers had "everything to gain" from seeing the agency's administration run by a private company. He said: "The logic of putting out the administration is simply that there are specialists who can do the job better and cheaper."

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