This section of the website is inevitably scrappy, since AMIPP cannot poll
all the other tens of thousands of trusts. The most authoritative source
for overall statistics is the Government Actuary's Department (GAD). It
although the information on pension protection against inflation is not
How does the IBM Pension Trust compare with others?
Fujitsu May 2009
British Airways situation (A PowerPoint
presentation.) December 2005 situation.
Unilever Pensions including a comparison with IBM.
Some General Notes
(from year 2000)
Many pension funds have a surplus, although this varies with economic conditions. One estimate put the surplus in the IBM fund
at 1 billion dollars, when it was at its maximum. Some examples of
How other Trusts are using their pension fund surplus
are shown below.
We have extracted some relevant information from press reports and pension periodicals. This will be updated to include new information as it becomes available.
The majority of C-Plan members will still be under the illusion that:
"IBM aims to compete favourably with the practice of other leading companies"
(quote from an IBM MIL - Management Information Letter)
Back in the 1980's it would have been commonplace to expect IBM's position in the
league table to be in the top ten.
However times have now changed and the current position for IBM in this same league table (albeit) different companies, is now in the bottom 10, out of a 156 schemes.
Out of the 150 final salary related schemes involved in a recent survey (ref: "Occupational Pensions"):
- 129 guarantee to provide an increase in pensions in respect to service prior to April 1997.
- Of these 111 schemes do make guarantees by reference to RPI.
- 20 of which give the full RPI increase
- 68 pay the RPI up to a max of 5%.
IBM's position on this is to state that they are meeting their commitments of
discretionary increases. HOWEVER despite representation by member elected trustees we
can get NO GUARANTEE of this increase, despite a £700 billion surplus.
This surplus if applied to the C-Plan, from where it was derived, would fund the full RPI to infinity.
(Depending on the actuarial assumptions at the time of calculation.)
Out of 156 schemes:
- ONLY 21 schemes provide discretionary increases on pre April 1997 service.
- 17 of these awarded increases in 1999 from .87% to 5%.
- IBM managed 2.4% against 3.2% for post 1997.
During 1998 the story is much the same, for pre-1997 service IBM awarded 2.1% but for post-1997 service it was 3.6%.
Throughout this period IBM has taken a pensions holiday.
A fuller account is available in A Decade of Decline.
Also see A Decade of Decline (2).
"How does your pension match up to the best?"
Here are some quotes from the Daily Mail - 9th June 1993 - yes that is 1993, not 1998 !!
They are based on information fromm the then latest "National Association of Pension Funds Survey".
- Three out of every four company pension schemes guarantee increases every year.
- Nearly half of all funds guarantee an increase in line with the cost of living or 5%, whichever is lower. Companies with this guarantee include BAT Boots, BP, Guinness and BT.
- Even in 1993 Shell were guaranteeing RPI up to 7% and Glaxo RPI up to 12%.
How other Trusts are using the Surplus
Here a a few examples of what other Company Pension Trusts have, or are doing, with
their pension funds surplus:
Last year M&S increased the spouses pension from 50% to the maximum allowed by law of 66.6%.
In a list of 489 occupational pension schemes, 88 of them now award two-thirds
pension to spouses.
Thorn (whose pension fund already awards 5%LPI to all 32,000 members), have proposed
splitting the current surplus 50/50 between members and company. The company takes
£50M gross (£30M net), each member receives an immediate 5% benefit increase and, in
addition members will be a guaranteed future increases of 7%LPI
(that is RPI up to a maximum of 7%). The proposal has been sent to all members for their
Comment: It was nice of Thorn to at least ask its members what they thought about it first!
However, even this 50/50 split is considered by some to be a 'Raid' - see
"£50m raid by Nomura on Thorn pensions"
See also Thorn at OPRA
Here are some quotes from the Shell Contributory Pension Fund newsletter, dated October 2000.
"The good news ..... earlier this year.... we gave a special pensions increase".
"pensions on the up..... This year the Company decided to use its discretion to award
an increase of 3.0% to all pensions in payment. A further 0.2% was awarded to bring
last year's increase up to 3%. This 3.2% increase maintains the SCPF's excellent record
on pension increases"
"It is also time to review the communications that the Company has with pensioners and
a special questionnaire is enclosed with this report. .... We want to know what you
"The Shell Pensioners Association (SPA) helps former employees to keep in touch.
It now has 15,500 members and 23 branches."
Its seems that Shell think more highly of their pensioners - a special increase, a questionnaire
and an Association.