Capita has reached an agreement with its defined benefit (DB) pension scheme trustees for further deficit repair contributions after its triennial valuation identified a deficit of £182.2m.

The company's results for the first half of the year said the deficit was expected to be recovered through recovery contributions, with the first six months of the year having seen it make deficit repair contributions of £140m to the Capita Pension and Life Assurance Scheme.

Capita has agreed to make a further regular deficit contribution of around £14m in the second half of 2021, contributions totalling £30m in 2022, and £15m in 2024, 2025 and 2026.

The previous agreement, from 2017, saw additional monthly contributions of £4.16m triggered from July 2020 until the 31 March 2020 valuation was finalised in June 2021.

These contributions, totalling £45.8m, were paid into an escrow account instead of the scheme, with the escrow account being released to the scheme later in 2021, and were included in the pension deficit contributions figures.

Additionally, the group made a special contribution of £50.2m in February as part of the ceasing of the pension scheme’s interest in the Capita Scotland (Pension) Limited Partnership, which was established in 2012.

This arrangement saw intellectual property rights (IPR) in specific group software transferred to the partnership and the rights to use, develop and exploit this IPR was licensed back to the group in return for an annual fee, with the scheme’s interest in the partnership entitling it to an annual distribution of £8.0m for 15 years from inception.

The company said that the pension agreement and its completed disposal of its Life Insurance and Pensions Servicing business in Ireland on 1 March 2021 meant it had “de-risked scheduled debt maturities this year and next”.

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