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Xafinity has handled public sector pension payments for more than 170 years. It started in 1836 doling out small sums to officers who made it to retirement. In 1948 it was given the job of paying health service pensions and in the 1970s took over all pensions administration for the armed forces and the NHS.
Today it straddles the private and public sector and pays the retirement incomes of 100,000 pensioners in the public sector.
Its main job is to accept pension payments from workers and calculate payments to retirees. For decades the process was straightforward, until the 1990s when workers began to put pressure on the government for enhancements to their pension benefits. They also wanted better protection for their pensions following the Robert Maxwell pensions scandal.
While public sector pensions were relatively untouched by these developments, pension administrators became embroiled in an almost annual series of system changes that is unlikely to stop, at least not for the foreseeable future.
The company began to capitalise on these developments in the 1990s as employers began to think they should outsource this burdensome process. In 2005 Xafinity was bought for £185m from its parent, the insurer Hogg Robinson, by private equity firm Duke Street Capital which saw an opportunity to merge the business with other providers and gain a foothold in a growing business.
In the three years since the purchase it has moved to handling more than £2trn worth of payments each year and more than 2 million pensioners worldwide received their pensions from the company.
Some of its private sector clients include IT services business EDS and GlaxoSmithKline, the Mineworkers Pension Scheme and Norwich Union. In the public sector it also pays the pensions of the police and Treasury workers.
Chairman Tim Robinson said at the time of the Duke Street buyout: "As an under-resourced specialist unit of a larger group, Xafinity was ripe for the sort of transformation that Duke Street specialises in.
"With a strengthened management team and their close support, we are in a good position to grow this business."
Duke Street was one of the private equity firms to be hauled up in front of the Treasury select committee last year to face questions from angry MPs fired up by accusations of asset stripping and poor industrial relations.
The firm, which was in dispute with workers at a recently purchased biscuit factory, was unrepentant about the benefits of private equity.
It denied accusations of asset stripping and said it was investing for the longer term and also pointed to the many awards won by Xafinity and the plaudits for its state of the art software that calculates pension payments.
Robinson claims on the company's website to have "extensive public and private sector experience and an excellent track record in building strong and successful businesses".
It is not known if he will be forced to resign following the revelations, which will damage the firm's reputation and lead other customers to demand a review of their own pension payment plans.
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