The contention between IBM and its employees is ongoing, but November 2009 is a suitable point to recapitulate since the regulated consultation has finished and the schemes' Trustee has made a statement.

The activities of the elected members of the Pensions Consultation Committee (PCCers), and their helpers, have been on the whole praised for their overview, for their proposals, and for their organisation of surveys and a "fighting fund" to pay for legal advice.  The limited criticism that there was related to the absence of a negotiating position that the final salary schemes should not be closed (at least until 2014), and also about the PCCer proposals being kept secret from employees initially.  The latter was explained as due to the PCCers wish to concentrate on interaction with the employer and avoid being swamped with employee interactions.  PCCers did hold meetings to give some information to employees.  More on the steps in the run-up and execution of the PCC can be found in weekly summaries.

The PCC period was frustrating because of the one-sided access to advice and information.  The employer's unwillingness to fund legal advice which could make their proposals look bad is understandable, but it led to the need for employees to provide funds, and consequent delay.  The PCCers lacked paid for actuarial and accountancy advice, which limited their ability to get involved with the reasons for the employer positions.  The employer judged that retirement practice before the proposals would not be disclosed.  [Although legal precedents have made this a consideration in early-retirement cases.]  The employer decided that the "Guarantee" content would not be disclosed, thus preventing consideration of its intent.  (Employer control over the trustee's choices versus any extra chance of collecting money if IBM UK was allowed to go bankrupt.) 

The "committee" concept was undermined when all the elected PCCers wanted the PCC to interact with the Pensions Trust Board but the PCC chairman decided against requesting that.  It is unlikely that the employees who elected the PCCers realised that that was the way the PCC would work. There are also other reasons to suspect company manipulation of the PCC process.  It was suggested to the PCCers that amendments to the proposals were the result of their efforts, whereas a statement from the trust indicates changes may have been agreed before the consultation began.

The statement is welcome, because although the company can ignore employees' input (and MP's input) it will find it harder to ignore the trustee or the Pensions Regulator.

The trustee's position is unclear in some parts.  The Members' Report wrote of concern about whether the "Company is acting in good faith with regard to affected members" and the statement refers to good faith.  From any research on the web you will find that the usual assertion is not "bad faith" but "failure to maintain the trust and confidence of the employee(s)".  A newsletter is not the place to pursue all the references but those people with sufficient enthusiasm should be able to do so, and obtain copies of judgements via their public library.  However, there are not numerous precedents and their applicability to this IBM situation is never precise, so there remains the problem that even Leading Counsel pensions specialists can hold widely different opinions.  This will be a concern for the trustee.  Legally:

'Taking and acting on a wrong view of the law may be maladministration if the decision-maker knows, or ought to know, that the state of the law is uncertain and that those who may be adversely affected by the uncertainty need to be warned about it.'

It is disappointing that the trustee expects to take "some time" to implement its decision to develop its case.  (What have they been doing for the last six months?).  It is now inevitable that employees will be asked to make decisions under the duress of Fear, Uncertainty, and Doubt (FUD) about whether the company can maintain its position.  The IBM Pensions Interest Group (IPIG), which evolved from the PCCers and their helpers,  has obtained, from the legally knowledgeable, a form of words that employees can use to record their qualification of any "consent" they might give to non-pensionable salary increases.

The "fighting fund" which is being used to buy legal advice, and hence gave rise to the activity described in the last paragraph of the trustee statement, was (almost?) entirely the result of employee contributions.  AMIPP has not been asked to publicise how others might contribute but will do so if asked.

While it is clear that "trust and confidence" has not been maintained, see this for example, it remains to be seen whether officialdom will consider the company responsible, or blame the victims.

The forum contributors, and the union Unite, are strongly concerned about an issue that is not directly a pensions issue.  The company is increasingly keen on a process of forcing a prescribed proportion of the staff to be given "unsatisfactory" ratings.  (This document gives the tone of how Armonk management sees the workforce as units rather than people.  MIS is Management Initiated Separation, PBC is the 1-4 assessment metric.)  The forum contributors provide plenty on the operation, fairness, and legality of this "performance culture".  Less is contributed about the efficiency of the approach.  When one thins a row of carrots in the vegetable patch it is fairly certain to be effective - the size of the carrots at the thinning stage is a reliable guide to their eventual size.  There is an approach in fish farming where the fish at an early stage are required to swim against a flow.  The strongest swimmers survive and the rest are flushed away.  No doubt that is effective, since the strongest swimmers are more likely to survive to the size to be sold.  Critics question whether IBM can effectively apply the thinning principle to staff.  The skill in obtaining a higher PBC rating may not translate to a quality promoting customer satisfaction.  People in groups achieve things because they are varied and adaptable - a set of clones does not make a good team. A rating by a manager may be a reflection on that manager's ability to arrange a role for the employee - a different manager assessing the employee at a different time in a different role may well give a different assessment.  We are likely to see a great deal of contention as IBM presses ahead with its mechanisms.