Unite criticises latest IBM pension scheme closure
proposals as ‘pain for employees and gain for
executives’
28 September 2009
Unite, the UK’s largest union, has today criticised the latest
IBM proposals announced to the workforce. This follows a backlash
by thousands of IBM employees because of its proposals to close the
final salary pension schemes to future accrual for existing
employees and alter the terms of its early retirement scheme.
The company’s revised proposals include the closure of the final
salary schemes to be put back one year to April 2011, 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.
Whilst these show some changes from the original proposals, the
changes of substance still remain including closure of the defined
benefit pension schemes to future accrual from April 2011 and the
early retirement changes to apply from April 2010.
Unite is still predicting that between 700 and 1000 people may
opt for early retirement prior to April 2010 when the new early
retirement provisions apply. The union calculates that typically
people in their mid 50’s could lose up to £200,000 with more in
some cases as a result of these changes from the retirement pension
they had expected to draw before the company’s announcement in
July.
In Fujitsu, another company proposing closure of its final
salary defined benefit pension scheme, Unite is organising an
industrial action ballot 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.
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.
“Bizarrely the National Association of Pension Funds (NAPF)
announced the award of a pension quality award to IBM earlier this
week, which only rubs salt into already suppurating wounds of long
serving IBM employees.
“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.”
IBM CEO Sam Palmisano is reported to have a total wealth in
excess of $115m including a pension balance of over $40m. $20m of
this was added last year alone. IBM's operating margin is expected
to grow to 18.5 per cent in 2009 up from 16.1 per cent last
year.
IBM has around 18,000 employees throughout the UK. The company
has several defined benefit pension plans which it is seeking to
close and is nearing the end of a 60 day consultation period with a
Pension Consultative Committee of employee representatives
including Unite members.
IBM has major sites in Portsmouth, Hursley (Winchester),
Warwick, London, Greenock and the North West.
ENDS
For further information contact Peter Skyte on 07768 931302,
Brian Gallagher 07957 995947 or Ashraf Choudhury in the Unite Press
Office on 020 7420 8914 or 07980 224761.
