FTSE's biggest loser: Capita staff vote to strike over pensions as the FTSE 250 firm is stripped of a Ministry of Defence contract

Lucy White
Members Of The UK's Royal Air Force Train With Merlin Helicopters In Calif.
The MoD contract began in 2014 and was meant to last for 10 years (Source: Getty)

As if a set of results which knocked Capita's share price wasn't enough for one day, the outsourcing firm has now been told staff will be striking over pensions.

Trade union Unite said today that 95 per cent of staff on a turnout of 72 per cent voted in favour of industrial action, due to the fact that Capita was trying to close the current defined benefit scheme and transfer it to a defined contribution scheme.

Read more: Shares in freefall for troubled outsourcer Capita as revenue slides

Staff for the firm, which serves businesses such as Sky, British Gas and the BBC, will take six days of leave beginning on 5 October.

“The disgraceful plans by Capita to slash the deferred pay that staff will get in retirement is utterly unacceptable. 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,” said Unite officer Dominic Hook.

But a Capita spokesperson said: “We are in the minority of companies still offering a defined benefit pension plan to a small number, some four per cent of our workforce, of our 73,000 employees.

Their accrued benefits in the existing defined benefit pension are protected and the new defined contribution offer is above the average terms offered by both our competitors and FTSE 100 companies in the UK. We are disappointed that these employees, some 550, are to support Unite’s strike action. We have plans in place to ensure that any potential disruption to our clients’ services is mitigated.

Capita has remaind the FTSE's biggest loser for most of the day, with its shared down 9.63 per cent at the time of writing.

The company also revealed in its results this morning that it had lost a major contract with the Ministry of Defence.

The £400m contract to operate living, working, and deployment facilities for the armed forces was won in 2014, and was meant to last for 10 years.

Read more: British Airways in talks with Capita to offload call centres in Manchester and Newcastle

But Capita was much criticised in the role for its delay in delivering IT systems, and a shortfall in the number of recruits it delivered.

Earlier today, Capita revealed pre-tax profits had fallen 26 per cent to £28m in the six months to June, while revenues were down three per cent to £2.07bn.

The company's chief executive quit earlier this year and a replacement is yet to be found.

Read more: FTSE reshuffle day: Capita and Dixons Carphone replaced by Scottish Mortgage Investment Trust and Rentokil Initial

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