The Senate is considering opting out of the federal government’s troubled Phoenix pay system as part of overall plan to operate more independently and move its corporate services outside of government.

The Senate issued a request for information (RFI) this week seeking input from the industry on new ways to manage pay and pension benefits for senators, their staff and Senate administration. The deadline for responses is August 15.

Conservative Sen. Leo Housakos, chair of the Senate’s powerful internal economy committee, said the problem-plagued Phoenix system contributed to the decision to explore other pay options, but added the Senate is primarily driven by a “philosophical” push to operate independently from the government.

“Senate leadership feels it is important to maintain independence between the executive and legislative branch so the initiative was conducted in that spirit to make sure the Senate is independent of government influence.

“And secondary, we have been reviewing the cost and efficiency of all administrative practices and it’s not a state secret that Phoenix has been challenging for a long period of time.”

Housakos said the Senate, as a small organization, may not have faced as many problems with Phoenix as government departments — but it hasn’t been immune. The Senate estimates that it spent $130,000 last year to resolve pay problems caused by Phoenix.

“The Senate takes the compensation of its workforce seriously. In the last two years, the problems generated by the Phoenix system have negatively impacted the quality and standards of service the Senate sets for its employees,” said Matthew Ryan, acting spokesman for the Committee of Internal Economy.

Housakos said the options may include an in-house pay system, bringing employees now paid through Phoenix into the existing private system used for senators. Another option would be to consolidate all employee pay under a single system and outsource it.

At the same time, the Senate also is looking for a supplier who can “provide the necessary record-keeping” for its defined benefit pension plans.

An RFI is used to gather information, feedback and interest from industry to help decide whether to issue a tender call for bids.

The Senate is in the midst of a sweeping human resources review, led by consulting firm Deloitte, meant to modernize its policies, practices and processes. That report is expected in September.

The move also comes as the Liberal government steps up efforts to fix Phoenix with an injection of another $142 million, much of it dedicated to hiring more compensation advisers.

Many federal departments have speculated behind the scenes about opting out of the new pay centre in Miramichi, N.B., and instead hiring their own compensation advisers. The Senate, however, is the first federal institution to publicly consider getting out of Phoenix and setting up its own payroll system.

It’s a move that is sure to rattle Public Services and Procurement Canada, which has been desperately working to fix the system and recruit more compensation advisers to keep all the 101 departments and agencies in the system.

But Housakos said departments don’t have the same flexibility as the Senate. The move could spark some envy or resentment among public servants who have been plagued by Phoenix problems — but Housakos said he doesn’t expect it will create a stampede of departments seeking to opt out.

“I want to be clear that this is not something the government can use as a remedy to for Phoenix across the board,” said Housakos. “The government has to maintain and administer payroll of the executive branch but as a parliamentary entity we have that flexibility.”

The Liberals have blamed much of Phoenix’s problems on the previous Conservative government’s decision to lay off 700 compensation advisers before the new system was even up and running.

The Phoenix system was rolled out to 300,000 federal employees working in 101 departments and agencies in two waves last year. The first 46 departments, covering about 191,000 employees, sent their pay transactions for processing at the Miramichi pay centre. The other 55 departments still manage their own compensation with in-house compensation advisers.

Departments that kept their compensation advisers were better able to juggle the many compensation rules and the new system’s glitches, and have reported fewer problems.

The Senate kept its compensation advisers and, a result, was able to “manage within the complexities and problems brought about by the new Phoenix system,” according to the RFI.

The government has been trying desperately to re-hire laid off compensation advisers, and recruit and train new ones, as part of its push to fix Phoenix and get it operating at a steady state. So far, the government has steered clear of hiring outside firms to shore up the number of compensation advisers; unions have strongly opposed to outsourcing any part of payroll operations to the private sector.

The Senate now has two pay systems and two pay cycles for about 935 employees that it would like to see consolidated into a single system. It relies on Phoenix to pay staff working for senators, as well as the those working in Senate administration. These 700 employees are paid every two weeks like the rest of the public service.

The Senate has a separate “private system’ for the 105 current and 130 retired senators, who are paid monthly.

The RFI calls for a supplier that “thinks out of the box”, can provide “error-free” service and can adapt quickly to unplanned requests or extra workload. Services must be provided in both official languages; all records and personnel information must be stored on infrastructure in Canada and kept up to date with latest technology and industry standards.

The supplier also would have to provide help-desk service — whether by email, in person or through a call centre — and offer a self-service website for employees to access their pay information and records.

After pay, Housakos said Senate will looking at revamping its pension plan and moving its management out of the control of the government. He said many senators have long complained that the existing plan is flawed, with senators contributing far more than they will ever collect.

Housakos argues the Senate eventually should consider whether all its accommodation, buildings and infrastructure should be managed by Public Services and Procurement Canada, which answers to the government of the day. He said that issue isn’t currently on the table — but he personally thinks PSPC shouldn’t be running he parliamentary precinct.

“I find it inappropriate … and something we should look at in the long term in the spirit of strengthening the independence of the Senate institution,” said Housakos.

“I think the House should consider it as well, but it is a bigger challenge for the House because the government holds the majority there and it doesn’t here.”