Govt extends Capita’s Teachers’ Pension Scheme contract to 2021

Written by Natalie Tuck

The government has extended Capita’s contract for the administration of the Teachers’ Pension Scheme by three years to 2021, it has been revealed.

In parliamentary written questions, the government was asked by Labour MP Jon Trickett, how long Capita’s contract has been extended, and what the cost of the extension was to the government. In response, Minister of State for Education, Nick Gibb, said that following the initial award of the contract in 2011, it has been extended for a further three years, and will end in 2021.

“The total cost of the contract extension is £10,763,000 per year over three years i.e. £32,289,000. The [Teachers’ Pension Scheme] is the second largest public sector scheme in the country, with nearly two million members and in excess of 9,000 employers,” he said.

The scheme’s contract with Capita is the largest single contract managed by the Department for Education and has been rated platinum quality by the Cabinet Office and “low cost, high quality” by external benchmarking, Gibb added.

The extension comes in spite of news last year, in which Capita revealed it had underpaid thousands of pensioners in the scheme. In its annual report and accounts for 2016-2017, it said that following an investigation into the payments received by an individual member of the scheme who complained of an underpayment, it was found that a wider population of the scheme were affected.

For members that retired between April 2011 and April 2015, their pensions were not uprated by inflation. In its report, Capita said a “formal rectification” project was in process to ensure member benefits, amounting to £35m, are accurately paid.

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