Find center of 1-1/4 PVC Cap and drill a hole that is 5/8" in size. Slightly larger than the 1/2" PVC pipe. It doesn't have to fit tightly, it's really just for aesthetics, and to keep the handle from pulling all the way out.
The easiest way to find the center of the circle is to place a square over the circle, lining up the the point on the edge of the circle. Then mark the spot where the square goes outside of the circle. Draw a line between two marks. Repeat this again by moving the square part way around the circle and drawing another line. Where the two lines intersect is the center of the circle.
For more in-depth instructions:http://www.mathopenref.com/constcirclecenter2.html
Next you'll want to use a dremel or sand paper to sand the PVC Bushing (1/2" slip to 1/2" threaded) so it can fit inside the 1-1/4" pipe.