The Association of Members of IBM UK Pensions Plans (AMIPP)
This page amended 2 Jan 2012
Keeping you informed

There are some decisions that are largely out of the Trustee's influence, although they have significant impact.  We see some of these in the changes to the Articles of Association which will come into force May 2012.  The changes will reduce the number of trustees from twelve to nine, reduce the Member Nominated Directors from four to three, and do away with the chairman's casting vote..

IBM can make these changes unilaterally because IBM owns all the shares of IBM UK Pensions Trust Ltd.  That does not mean IBM owns the Trust's funds but it does give IBM control of the structure of the Trustee, what the appointees are paid, and so on.

Cynics amongst us might say that three ineffectual MNDs will not be different from four ineffectual MNDs, but there will inevitably be a knock-on effect on this year's MND elections.  The elections are the responsibility of the Trustee and it has been suggested to the Pensions Trust Manager that scheme members should be consulted in advance of new arrangements.

With so many members becoming deferred without choice it would be grotesque to continue treating deferreds as second class scheme members.  And if you believe in reserved places, rather than relying entirely on the voting, then a reservation for a M-Plan member looks sensible.  2 Jan 2012.

There are two High Court cases in progress.  Loosely, one is about whether IBM reneged in 2009 on its 2006 promised deals and the other about whether our current Trust Deeds need change to reflect the true intentions as they were in the 1980's.  The hearing for the first is planned for 2013, the second for 2012.  (There has been some confusion because both involve the C Plan and the Trustee has referred to the second as "the C-Plan case").   10 Dec 2011

You might agree with this quote from a former chairman of the Pensions Regulator: “It is hugely important to pensioners in defined benefit schemes for decades and decades to come and they should be protected. But companies and most of their employees do not have any interest in these schemes, so it is just a burden [to them].”  10 Dec 2011

Newsletter 48  7 Dec 2011

This website is about occupational pensions, and especially about IBM UK pensions practice.   Occupational pensions tend to have a long period when the employee is buying the pension with work and contributions, followed by a long period of pension in payment after retirement.  Over such a long period there will be changes in the behaviour of the company.   In some cases this is cause for outrage, when the members of a pension scheme (the consumers) feel they have been wronged by the employer (the provider).  A question of consumer protection arises - whether a company can do and say whatever it likes when it wants to recruit, retain or retire employees and then do something different subsequently.

IBM UK is an extreme case.  For decades it obtained a talented, loyal, ununionised workforce by a practice of being competitive with leading companies in all of its benefits.  In answering a question about pensions in payment (PIP), ie how the value of pensions is affected by inflation, IBM confirmed and documented that for PIP, like all the other benefits, it aimed to be competitive with leading companies.  This was only an "aim" because IBM's economic circumstances might have prevented it.  Another document explains the constraint of affordability.  

IBM's PIP practice has been the worst of all comparable companies.  It turns out that this is not due to affordability, but to a mechanical rule for degrading the value of pensions, irrespective of economic conditions or what other companies did.   This transition from "One of the Best", in practice and predicted, to actually "One of the Worst" took place after many people had retired.   In the midst of this, an  extreme action of totally changing the nature of the pension plans was made, perhaps illegally, without as much as advising the scheme members about how it would be funded. The manner in which these changes were put through the Pension Trust board, with U.S. headquarters monitoring that U.K. board and appointing U.S. executives to it, so that the changes reflected U.S. requirements rather than English notions of "fair play", was exceptional.

As consumers of occupational pensions, with no power to bargain after retirement, is there anything the retirees can do? Is there any legal constraint, on what happened or on how the pensions trust was used to make it happen?

If you are concerned, you are not alone.  More than 3000 people receive our electronic newsletter.  Some have been looking into the affair for years, as our situation report explains.  Dozens wrote to their MP, dozens wrote the authorities and agreed that a small set of complaints, taken together, would cover their concerns.  This website records a thousand messages offering information, advice, and comment about what should be done.  A media campaign? Change the law? Hire a lawyer? Petition the elected trustees? Enlist the help of pensioners' associations nationwide? Join a union? The pros and cons are discussed.

If you are an active member of a pension plan you may also be concerned - your bargaining power, to take your skills to a different company, represents a last resort.  If you have a deferred pension, it may be large enough to matter to you.  Even if your interest is only a general one, we suggest you bookmark this website - our notes explain how to find what is new on each visit.  We suggest you register for the newsletter which usually comes out at six week intervals.  If you are new to this site, you can read about our general situation now.   This home page cannot describe everything that is on the website, but the links on the top left will help you find things, and submit your opinions, and read others. 

This site is maintained by the Association of Members of IBM UK Pension Plans.

You are welcome to provide material for this site (for example, any correspondence, reference material, background, legal items etc.). Please send any input to the Webmaster

There are some notes about the site, with the usual disclaimers, and navigation advice.

 

Eat and drink pleasantly for what you did beforehand in the days gone by. [Qur'an 69.24]