The Association of Members of
IBM UK Pension Plans (AMIPP)
 
The Ombudsman's Determination     (This page created on 24 October 2004)

 

A further set of comments was added on 29 Oct 2004

The Ombudsman has issued his determination on the known complaints against IBM and the IBM Pensions Trust.   None of the complaints have been upheld.

In case this news fills you with such a surge of feelings of injustice that you want to do something immediately, we remind you of the "Eacott Initiative" which will put you in touch with like-minded people. (You can reach AMIPP officials by email through our contacts page.)

If you are willing to wait for wheels to grind, you can expect AMIPP to produce an analysis of the determination and of the options ahead.  (The determination has 67 pages. We have 27 days in which to appeal)

The text below is for the benefit of anyone looking for an instant AMIPP response to the determination.  It should be read in the context of the website as a whole since a short text necessarily over-simplifies.

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At the turn of the century, some members of the IBM UK occupational pensions scheme were asking the question "can a company do and say whatever it likes when it wants to recruit, retain or retire employees and then do something different subsequently?"
 
Recently they had an answer from the Pensions Ombudsman, and the answer for them is "Yes".
 
Dozens had complained to the Occupational Pensions Advisory Service, and the complaints were condensed into those of four representative scheme members.  After four years of investigations the Ombudsman has decided not to uphold any of the complaints.
 
The Association of Members of IBM UK Pensions Plans (AMIPP - www.amipp.org.uk) takes the view that

"In a minor echo of the Hutton and Butler reports, this report describes behaviour that a typical person would find reprehensible, yet the investigator finds nobody to blame.

 
IBM UK promised that for its pensions in payment policy, as with other benefits, it would aim to be competitive with leading companies.  In practice, they have chosen to make the erosion of pension value with inflation the worst of all comparable companies.  The IBM UK Pensions Trust chose to use funds that the final salary scheme members had accrued, with the addition of their contributions, to fund a money purchase scheme for a different collection of employees, thus undermining the final salary scheme members' prospects and speeding up a move towards what is now a large deficit in the final salary fund.
 
Either the Ombudsman has mis-interpreted the law, or the law has not protected the reasonable expectations of the scheme members.  In this respect the IBM UK members are like the ASW Steel members; no IBM scheme member will suffer to the extent that the ASW members have suffered but the two groups suffer for the same reason:  Trust Law and its interpretation have not protected their pension promise." 
 
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