199. Mr Murphy's complaint that the effect of the 1997 amendments was to allow a new class of member to benefit from the C Plan seem to me to be based on a false premise. As members of a money purchase arrangement the new class of members (ie those in the M Plan) benefit only from the contributions made by themselves or their employer. The establishment of the M Plan did not bring with it any diminution of the accrued benefit entitlement of those in the C Plan. It is true that by using surplus monies in the Fund the Principal Employer was for some years able to avoid making additional cash payments (in respect of both C Plan and M Plan members) into the fund. But I have not lost sight of the fact that if the changes in 1997 had not been made the C Plan could have continued to receive new members, as new employees joined IBM, and each one of which could be said to benefit from the C Plan to which hitherto they had not been contributing.

The Ombudsman's position is based on the false premise that members in otherwise identical schemes, one with good funding and one without, are in the same position.  The 65,000+ UK scheme members now looking at the Financial Assistance Scheme would say differently.

The Ombudsman would appear to regard all the legislation about statutory surpluses, and how payments to employers are predicated on the protection from inflation delivered,  to be pointless since "accrued benefit entitlement" is unaffected by them.

The final sentence is an interesting example of style - the Ombudsman says he has not lost sight of some fact but does not reason whether the fact helps Mr Murphy's case or not.  Mr Murphy would say that new C-Plan members are crucially different from new M-Plan members because the relation between C-Plan members is that their contributions can help one another whereas the relation between C-Plan and M-Plan members is made one-way by the transfers mechanisms - the C-Planners help the M-Planners but not vice-versa.