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Prudential drops Capita from £700m pension contract

Prudential drops Capita from £700m pension contract

M&G Prudential has dropped Capita as the administrator of its life and pensions contracts.

When the deal was first announced in 2007, Capita said the contract was worth £722 million over 15 years. In a statement released today the outsourcing company said that over 2017 the deal with Prudential added £80 million of revenue. 

M&G Prudential said the contract for administration of these pension contracts will be moved from Capita to Diligenta, a subsidiary of Tata Consultancy Services from 31 July.

The deal will see 1,100 Capita roles in the UK move over to Diligenta with a further 700 Capita jobs in India move to Tata Consultancy Services.

Capita has provided administration for M&G Prudential, including for its PruFunds, for the last 10 years. 

The new contract with Diligenta is for a 10 year period, and will also see it provide some of Prudential’s IT infrastructure.

Around 180 Prudential jobs will move from M&G Prudential under the deal.

John Foley, chief executive of M&G Prudential, said: ‘This partnership with TCS (Tata Consultancy Services) is an essential element of our strategy to create a digitally-enabled business. Our customers will receive a better service - day in, day out - as a result and our colleagues will be better equipped to provide that service more efficiently.

‘Given its scale, its digital expertise and proven experience in the administration of savings and investments, TCS is the best choice.’

Capita's share price fell following the announcement, hitting high profile fund managers including Neil Woodford and Mark Barnett.  

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