Most final salary type deferred pensions are increased over the period between the end of the member's pensionable service for IBM UK and the start of their pension payments, to match inflation up to 5% p.a.  This is a regulated minimum uplift of the amount of pension entitlement established at the end of the pensionable service. 

Strictly speaking it is the pension excluding its Guaranteed Minimum Pension which is treated in this way, but for a simple illustration that complication can be ignored.  (The GMP is also revalued during deferment, but according to different rules).

The Social Security Act of 1985 introduced this Limited Prices Indexation protection for service completed on or after 1st January 1985, for a member who left pensionable service on or after 1st January 1986.  The Social Security Act 1990 extended the revaluation requirement to all service for members leaving pensionable service after 1st January 1991.

You will notice that leaves a hole in the protection for those who completed service before 1991.  The Trust and IBM UK could have decided to provide some protection for these members, but did not.  As an example consider somebody deferring in 1975 with a £1000 p.a. pension and taking the pension in a recent year, who would find that they still had a pension of £1000 p.a.  However, inflation would have made that £1000 worth less than £200 in 1975 pounds.  Most of the value of their pension will have been wiped out.

It is safe to say (particularly with hindsight) that such a person made a bad financial mistake. If they had taken their pension as years of service with a new firm then it would have inflated with their salary.  If they had taken their pension as a sum of money to another pension provider it would have grown under investment with that provider.  Only the choice of leaving it with IBM gave rise to the full impact of inflation.

It is too late to undo such a scenario (although pensions in deferment can be moved as money to another provider at any time).  The scenario illustrates the importance of members knowing what their options are, keeping track of what they will be getting as part of their overall financial planning, and being aware of how IBM's pursuit of cheapness for its schemes promotes pensions undermined by inflation. 

As with all this website, none of the above is financial advice.  You should not act on anything without first validating it for yourself.