UK – A group representing members of IBM’s UK pension schemes says it is “reasonable” for members to be concerned about the schemes’ outlook.
“It is reasonable for scheme members to be concerned, in the light of hardships which some members of other UK schemes have suffered recently,” said the Association of Members of IBM UK Pension Plans.
The members’ association added: “Concern will have been heightened by the fact that our scheme has the worst record on pensions in payment and even after that cheapening it still has a ‘large’ deficit.”
The comments follow a report last week on IPE that the computer giant was considering the options – which could include wind-up – for its multi-billion pound UK final salary scheme. The company has not denied that it is considering winding-up the scheme, which closed to new members in 1997.
“It is IBM policy not to comment on rumour and speculation,” Joe Hanley, media relations manager of IBM UK told IPE today.
He pointed to a statement by trustee chairman Jim Lamb, which states: “The company has confirmed to the trustee that it remains the company's current intention to continue to support the plan through the payment of employer contributions in accordance with the provisions of the governing trust deed and rules.”
The IBM scheme members’ association says Lamb’s statement is “weak and indistinct”. It said: “It is of course possible that IBM is planning changes and it is highly likely that IBM, like every other pension sponsor with a final salary scheme, has given some consideration to potential changes.”
But it adds it is unlikely the scheme will be wound up due to the high cost of buying annuities. It says: "Although IBM has the power to wind-up (and the Trustee has that power also), the scheme will not be wound up while IBM stays solvent and financially astute."
The member association maintains that IBM’s policy on pensions in payment – or how the value of pensions is affected by inflation – is the worst in the UK. Hanley did not respond to this specific point.
A person familiar with the situation who declined to be named told IPE that scheme members have taken IBM to the Pensions Ombudsman. IBM’s Hanley also declined to comment on the action. A spokeswoman at the Ombudsman said it was not the office’s policy to comment on cases.
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