Union slams new IBM pension scheme proposals

'Pain for employees, gain for executives'

Article comments

The Unite union has slammed IBM’s latest proposals to close its pension scheme as ‘pain for employees and gain for executives’.

IBM provoked anger among staff in July when it announced plans to close its final salary pension schemes to future accrual for existing employees and alter the terms of its early retirement scheme.

Under revised proposals the closure of the final salary schemes will be deferred for one year to April 2011 and limited enhancement of company contributions to the defined contribution money purchase scheme for 2 years for those transferring and retention of current death benefit and ill health provisions.

Peter Skyte, Unite national officer for IT and communications, said: “The latest IBM proposals, whilst modifying some of the detail and mitigating some of the impact in the short term, do little to alter the substance of the company’s original proposal and still propose the closure of the defined benefit pension scheme and replacement with a vastly inferior money purchase scheme.

“These proposals and current forecasts of increased IBM profit margins this year demonstrate all too clearly that one IBM employee’s pensions pain is an IBM executive’s pay and bonus gain.”

Unite believes up to 1,000 people will chose early retirement before April 2010 when the new early retirement provisions apply.

The union believes people in their mid 50’s could lose up to £200,000 as a result of changes from the retirement pension they had expected to draw.

An IBM spokesperson said the company "is in a process of consultation as required by law during which time employees will have the opportunity to ask questions and send feedback on the proposals". He refused to comment further.

Staff at Fujitsu, another IT services company proposing closure of its final salary defined benefit pension scheme, are voting for industrial action following an earlier consultative ballot in which 87 per cent of members voted in favour of strike action and 96 per cent in favour of industrial action short of a strike.

IBM CEO Sam Palmisano is reported to have a total wealth in excess of $115m including a pension balance of over $40m. Some $20m of this was added last year alone, the union claims.


Send to a friend

Email this article to a friend or colleague:

PLEASE NOTE: Your name is used only to let the recipient know who sent the story, and in case of transmission error. Both your name and the recipient's name and address will not be used for any other purpose.

We use cookies to provide you with a better experience. If you continue to use this site, we'll assume you're happy with this. Alternatively, click here to find out how to manage these cookies

hide cookie message
* *