IBM UK facing 'backlash' over pension snuffing
Unite - Britain's largest union - has warned IBM UK of a coming "backlash" from thousands of employees over its decision pull a prime pension plan out from under 28 per cent of its workforce.
In early July, the company shelved its Defined Benefit or "final salary" pension scheme, which would have guaranteed retired employees a predefined portion of their final salary.
"IBM is facing a backlash against its pensions proposals," reads a statement from Peter Skyte, Unite national officer for IT and communications. "Hundreds of workers are joining the union determined to stand up to this unacceptable attack on their pensions. These highly skilled and experienced staff were key to the company’s survival and they view the company's proposals as a kick in the teeth.
"IBM is a highly profitable company with substantial revenues and cash reserves. But it is using the recession as a cloak to close its pension schemes to existing members and further line the pockets of its shareholders and senior executives at the expense of its loyal workforce."
IBM retains its Defined Contribution or "money purchase" plan, where employees contribute portions of their salaries to a pension fund that puts the risk on them - not IBM. But the final salary plan will be closed to further accrual in April 2010, and until then, salary increases will no longer count towards the plan. Once they end their memberships in the final salary plan, employees have the option of joining the money purchase plan.
About 28 per cent of the company is still on the final salary plan.
Unite estimates that IBM employees in their mid-50s could lose up to £200,000 thanks to the change in pension schemes and that it will push between 700 and 1000 employees into early retirement before April 2010.
Fujitsu recently made a similar announcement and it's now facing an industrial-action ballot by Unite.
An IBM UK spokesman declined to discuss the matter. "IBM 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 said. "It would be inappropriate to discuss further during this consultation period." ®