Union predicts retirement surge over IBM pension changes

Management gains for workers' pain

By John Oates • Get more from this author

Posted in Financial News, 28th September 2009 12:48 GMT

Free whitepaper – Thermal design of Dell PowerEdge server

Union Unite is predicting staff at IBM will walk out, opting for early retirement, rather than accept reduced pensions from the firm.

IBM, along with dozens of other firms, is stopping its final salary pension scheme in order to cut costs.

But Unite said today it expects between 700 and 1,000 people will opt for early retirement before the new terms come into force in April 2011. The union reckons that staff in their mid-50s could lose up to £200,000 from the changes proposed.

Peter Skyte, Unite national officer for IT and comms, 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."

Big Blue and its workers have been negotiating since July, on the pension issue and has pushed the date back for the end of accruals to April 2011 from April 2010.

The union noted that Sam Palmisano, IBM's chief executive, saw his pension pot jump $20m this year to $40m.

At Fujitsu, which is making similar moves, Unite is organising a strike ballot after 87 per cent of staff called for action over the firm's changes to pension arrangements. ®

Free whitepaper – Dell PowerEdge servers 2009 - Memory