This page created on 26 October 2004

The Determination nominally covers five complaints.  The pioneering complaint is by Mike Cawley.  One of the complaints, from Brian Marks, is only relevant to the particular circumstances of his commutation choice, whereas the other three complaints, from Dave Mitchell, Alan Murphy and Brian Marks have the characteristics of a "class action", ie success with these would imply some class of members could complain successfully.  The history section of this website, and other longstanding pages, describe how the complaints came to represent the position of the dozens of members who involved OPAS.  

This large page has links to all the paragraphs of the Determination.   The quotations from it are obtained by Optical Character Recognition of a paper copy so there is a possibility of flaws - the official electronic version is expected to appear on the Ombudsman Office website.  Where the context does not make it clear what text is AMIPP comment, our comments are in navy.

Before discussing the Determination, we should say what we are and not allowed to put on this website.  We can detail the complaints because we authored them.  We can quote the Determination - it is public document that cannot now be changed.  We cannot describe how the investigation developed - who said what when and when/if the Ombudsman changed views, because confidentiality is part of the process.  We can tell you what the Ombudsman has said in letters to MPs and in general commentary on the pensions scene.  We can tell you what the Ombudsman's Office said to authors before investigation of their complaints began.  You can reasonably expect that arguments favouring the complainants, which have appeared in AMIPP Newsletters over the years, were put to the Ombudsman.  

We can speculate about Ombudsman's reasons when he gives none, just as you can.

As a further preamble, we should warn you not to expect a report in the IBM style you may be accustomed to, with first some facts and background material, then an analysis of relevance and importance, and then conclusions.  In this Determination that middle section is largely absent.   We should also warn that where the Ombudsman strikes down some proposition that would favour the complainants it does not follow that some complainant made the proposition.  The text is littered with what we call "Straw Men" - propositions that are both constructed and struck down by the Ombudsman, thus distracting attention from the claims actually made, and possibly erroneously suggesting that silly claims were made.

The following summary is undoubtedly biased to a complainant viewpoint.  You can read it without our spin by following the links and reading the text in black Times New Roman font.

Paragraph [1] says the Ombudsman plans to do his job, as does [2]. [3] is an example of the Ombudsman declaring a fact - "sufficient commonality".  The Ombudsman has been given medieval powers to declare facts.  Just as medieval theologians could declare the world the centre of the universe, so the Ombudsman can declare facts in the determination.  These "facts" cannot be challenged, because a determination can only be appealed on a point of law.  In this case the fact declared is largely right - you may recall from newsletters that the complainants made efforts to convince the Ombudsman that four of the complaints should be taken together.  

[4][5][6][7][8] Describe components of the complaints. [9] does so incorrectly.  Remember the Ombudsman can proclaim what our complaints are, and even if that is totally contradicted by the written complaints and their authors, there is no appeal. Similarly [10], [11] and [12], with [12] particularly misrepresenting.

[13] is the paragraph where the Ombudsman chooses not to uphold many of the complaints by not investigating them.  He says  "I have decided not to investigate or issue a determination about any actions of the Respondents prior to the Definitive Trust Deed of 1995."  Since the complaints are about dishonoured promises and some of the promises were made before 1995, he does not investigate them.  The complaints become not upheld, not because they were investigated and found lacking but because they were not investigated.

It is particularly galling to find the passage of time given as a justification for this, when much of the passage of time is down to the Ombudsman's Office.

[14] describes part of Alan Murphy's complaint, about AVC use. [15] is about whether a company can do or say whatever it likes when it wants to recruit, retain or retire employees and then do something different subsequently. [16] covers the divergence of views between the complainants and the Ombudsman on what is relevant to the investigation, and how inferences can be made from patterns.

[17][18][19][20][21]*(of interest)[22][23][24][25][26][27][28][29][30] [31][32]*[33]*[34][35][36]*[37][38][39][40] are largely undisputed facts about IBM, the scheme, the context etc., leading up to the decision to accept IBM's proposals. The most significant aspect here is that the trustees never considered what the complainants regard as the best deal for the members - starting the M-Plan but without funding it from the C-Plan.  Was this a failure to consider a relevant factor (which is maladministration)?

[41]*[42][43][44][45][46][47][48] concern turning this decision into documentation. [49] shows they did not get around to actually bringing the amendment into play until Feb 2000. [50][51] are about the amendment and its context. [52][53][54][55][56] are a claim that the originators intentions would not permit the change, and a response.

[57][58][59] is where the complainants say that a "single trust" (both C-Plan and M-Plan under the same trust deeds and trustees) is different from a "single fund" (funds of the plans interchangeable).  The respondents don't dispute that but say they intended both single fund and single trust.

[60][61][62][63][64][65][66][67][68][69] are about how a "surplus" arose, and consideration of the use of it. [70][71] is the "Big Mistake" about what choices the Trustee had. (cf [17]-[40] above) 

[72] Begins the discussion of legal precedents for final salary plans transferring monies to separate money purchase schemes. [73] quotes a judge "... it would in my view constitute a breach of the implied obligation of good faith on the one hand to enlarge the class of employers and so bring in large categories of new members and at the same time decline to make contributions in respect of such new members for the purpose of running off a surplus which has arisen in relation to other members at the time at which the surplus was certified."  If that is a breach of faith, is what IBM did also a breach of faith?  Large categories of new members and declining to make contributions certainly fits, see [74].  [75][76] refer to the Barclay's case, which was resolved on appeal during these investigations. Barclay's would be a killer for the complainants on this issue if it could not be shown there were significant differences between the Barclays and IBM cases. [77] introduces two differences.

[78][79] return to the question of whether the transfers between plans could/were legally added to the deeds.

[80][81][82] are the assertions about whether employees gained from not having to contribute more when regulated increases became the law.  You will see [32] that IBM had said they would not raise contributions anyway, but was that only on the assumption the Trust would do everything they wanted?

[83] picks up the timeline of events. [84] elaborates the claim that scheme members were left to assume that the M-Plan had its own funding, and [85] offers a defence. [86][87][88] describe more communications.  What fund did "this fund" in [88] refer to?  [89][90][91][92][93][94][95] continue the story of what members were told and not told.

[96][97][98][99][100][101][102][103][104] begins on the issue of how pensions in payment policy became as it did. [105][106]* goes further into the story of how the decisions were made in IBM before the Trustee had taken a position on what to recommend.

[107] Begins on the events which precipitated Barry Morley's resignation.[108][109][110]* confirm that the Trustee was still not recommending increases.

At [111] the consideration of guaranteed increases begins.  [112] covers the Morley resignation (or you may think fails to). [113][114][115][116][117][118][119][120][121][122][123][124][125][126][127] continue a Trust/IBM dialogue on prior "discretionary practice".  Whether they were referring to the 70% rule or just to the non-mandatory nature of the increases is not clear.

[128][129][130][131][132][133][134][135][136] picks up on who the trustees were, and how the lot that decided things in 1996 differed from those who went along with it in 1997.

[137][138][139][140] introduces Corporate Instructions, the way IBM Corporation tells IBM UK what to do.

[141] is about the Trustee discussing a public survey of pensions in payment policy.

[142][143][144] (future cost of 70% increases put at £475M) [145] is the Trustee discussing what they might do about the poor IBM position and deciding to do nothing.

[146][147]*[148][149][150] Brings the story up to year 2000, with better efforts by the Trustee but not by Mr Lamb.

[151] Dubious account of its process by IBM.

[152][153][154] Up to 2001, and Trustee trying harder.

[155] The one-off adjustment proposal, refused.

[156][157][158] More justification of its policy from the company.

[159][160][161][162][163][164][165][166][167] On some of the conflicts of interest.

[168] The "Omnipotent Ogre" argument.

[169] About "competitive".

[170][171][172] Begins a listing of documents.

[173] The aim to compare favourably. [174][175] Affordability.[176][177] One of the worse.

[178] What bargain? [179][180][181] Trust and confidence

[182] Begins conclusions[183] On the missing document[184]

[185] Money Purchase an extreme change

[186] One fund (not the same as transfers allowed)

[187] Funding the M-Plan separately [188] Loss of C-Planners prospects.

[189] Payment to the employer?

[190] Use of the fund

[191] Alan Murphy's position. [192] Another Strawman

[193] What the trustee contemplated.

[194] Begins consideration of the distinctions from Barclays case.

[195] Can't differentiate from Barclays because that would cost the employer too much?

[196] Ignoring by misrepresenting the third distinction from Barclays.

[197] Denying one of our distinctions from Barclays.

[198] On improper use of a power.

[199] About Alan Murphy's complaint.

[200] About information to members.

[201] Undecipherable?

[202][203] On how to detect failure to manage conflicts of interest.

[204][205] On conflicts of interest.

[206] Concludes the trustees got the best deal available.

[207] About surplus and expectations.

[208] Confusion about deferred pay.

[209] Suggests C-Planners should voluntarily have given up on their promise.

[210] Dross

[211] About "changing the practice". [212]

[213] Says that because the power lay with the employer they could do what they liked with it.

[214] The nearest the Ombudsman comes to facts about what pensions IBM UK has delivered.

[215] Says no need to look at the employer's pension promise because the Ombudsman can do nothing if it is broken.

[216] Concludes on the employers duty of good faith.

[217] About what some hypothetical members might have thought.

[218] Covers incorrect Corporation influence but not why it was uninvestigated.

[219] concludes about recent increase proposals.