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Capita talks break down and staff to strike over pensions

Capita talks break down and staff to strike over pensions

16 October 2017

Unite, the union representing staff at Capita, has announced the breakdown of last minute talks at Acas in the pensions dispute. Staff will now be taking part in nine days of industrial action because Capita is attempting to close the current defined benefit scheme and transfer staff to a defined contribution scheme.

Unite met with the employer last week to try to find an acceptable settlement but unfortunately the employer refused to make meaningful changes to the damaging proposals. Staff at Capita have voted overwhelmingly in favour of strike action in a ballot, calling on their employer to give them a decent pension. In the industrial action ballot 95 per cent of members voted for strike action, on a turnout of 72 per cent. 

Unite has now informed Capita that Unite members will be taking nine continuous days of strike action starting on Saturday 28 October 2017 ending on Sunday 5 November. Unite conducted an industrial action ballot following the proposal to close the current defined benefit scheme. In June Capita informed its employees of significant changes to the pension arrangements. Staff in the scheme will suffer a massive cut in their retirement income as a result of the proposals.

Dominic Hook, Unite national officer, said: “It is deeply disappointing that Capita staff are being forced into industrial action because of their employer's disgraceful plans to slash the deferred pay that staff will get in retirement. 

“Unite suspended its planned strikes in good faith in order to reach a settlement with Capita. Unfortunately the company has failed to make a reasonable offer to address the concerns of their workforce.

“Capita’s pension proposals will have far reaching consequences for the retirement of many Unite members. Some staff will lose a shocking 70 per cent of their retirement income.

“There is no justification for highly profitable Capita to treat its workforce in this manner. The extremely high vote in favour of strike action shows how strongly members feel about this.

“Capita must urgently rethink these pension proposals in order to prevent industrial action.”

The union is calling on the companies which outsource contracts to Capita to intervene to settle this betrayal of staff facing the loss of a significant proportion of their retirement income. 

If Capita implements this proposal, then Unite has a real concern that it will open the door to further attacks on the other company pension arrangements. The Capita sites where Unite members are impacted are:

  • Birmingham (two locations)
  • Reading
  • Bristol
  • Manchester
  • Stirling
  • Belfast 

Unite members who are affected are employed by Capita Life & Pensions Regulated Services Ltd, there are also some employed in Capita IT Services Ltd.  The following Capita contracts will be affected:  

  • Prudential
  • Royal London CIS
  • Phoenix / Royal London (Birmingham)
  • Friends Life
  • Specialist Services (all sites)
  • IT Programmes /projects (all sites)

There are also some employed in Capita IT Services Ltd and Capita Employee Benefits

ENDS

For further information contact Saba Edwards on: 07768 693 953.

Notes to editors:

Case study 1: 60 year old aims to retire at 65 (normal retirement date). Their salary is £25k and they currently pay 3% into the scheme. If they remain in the current scheme, their pension earned in those final 5 years is around £2k per year. If they are moved to the new scheme, and continue to pay 3%, then their pension earned in those final 5 years is projected to be around £350 per year. This is a loss of around £1,650 per year. If they are in retirement for 20 years, a total loss of about £33k.

Case study 2: 35 year old the employee is currently paying 7% into the scheme. The projected pension from this, were they to remain a member until retirement, would be around £22k pa. On being moved to the new proposed scheme, and paying 6% until retirement, their projected income is around £7k. Along with a deferred pension of around £4k, their total pension is now around £11k – roughly halved. If this colleague is in retirement for 20 years, they will lose a total of almost £220K.

  • Unite is Britain and Ireland’s largest trade union with over 1.4 million members working across all sectors of the economy. The general secretary is Len McCluskey.