Capita expects to lose up to £40m over pension scheme fiasco
Summary
Capita announced it expects to lose up to £40 million in profits due to problems managing a civil service pension scheme. The company is facing criticism for poor service that caused delays in pension payments and is working with the government to fix the issues.Key Facts
- Capita is responsible for managing the civil service pension scheme, which has 1.7 million members.
- The company admitted poor service has caused thousands of civil servants to wait months for payments and retirement details.
- Capita expects extra staff costs and penalties will reduce its annual profits by £25-40 million.
- The government has withheld nearly £10 million from Capita because of missed service targets.
- Over 6,700 retirement quotations and 4,100 bereavement cases were still outstanding at the end of the last month.
- The government lent £15.6 million in interest-free loans to about 2,700 people affected by the delays.
- A taskforce led by HMRC is working to clear the backlog, costing the government around £12.5 million.
- Capita executives said the pension scheme’s complex rules and missing data have slowed processing.
- The company’s public services chief considered resigning but stayed to support staff during the crisis.
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