From the Message Board - 26 September to 17 October

Posted by Tom Heneghan on 26 September 2000 at 15:01:02:

Fellow members of the IBM C Plan

Now that John Spencer, who is the Technical Specialist allocated to us at OPAS, has
decided that we have cause for complaint against the company, the Chairman and the
Trustee Directors of the IBM Pension Plan and that our case is being forwarded to the
Occupational Pensions Ombudsman it would certainly help if we were supported by
more individual complaints. At the present time John is considering only twelve
complaints from the many thousands of C Plan members. If you consider that you are
not being equitably treated then I would urge you to make a complaint to John
Spencer at OPAS Ltd, 11 Belgrave Road, London SW1V 1RB.
I am being asked by many retirees for the significant bullets in any complaint and I
therefore attach my views on why we are not being treated fairly. After reading these
you can decide whether you wish to join us in our complaints to the Ombudsman

1. The Trustee Directors have been guilty of Dereliction of their Duties by not
advising the Members of the C Plan that the original Trust Deed was amended on
24th April 1997 by the creation of a Defined Contribution Plan ( M Plan) to be
funded from the surplus in the C Plan fund plus member's contributions. Since no C
Plan member can benefit from the M Plan it surely was important that C Plan
members were consulted or at least advised of this amendment.

2. The Trustee Directors were further guilty of not advising members of the C Plan
that another Amendment to the Trust Deed was implemented on 24th February 2000
removing the obligation on "The Employer" to make the statutory contributions to the
Retirement Accounts for each member of the M Plan. This was obviously done to
attempt to clear the way for these contributions to be made from the C Plan surplus in
the light of the Ombudsman's decision in favour of the Barclay's Bank Retirees.

3. There has not been an equitable distribution of the C Plan surplus. The company
has taken 100% contribution holidays from the C Plan since 1997 and has at no time
made any contribution to the M Plan. On the other hand since its inception in 1983
until October 1999 increases to retirees in pension from the C Plan have lagged
behind inflation by almost 20% based on information from the Department of
National Statistics.

4. Actuarial assumptions have been adjusted without the agreement of members to
reduce the C Plan surplus which is currently running at circa £700 million.

5. The C Plan surplus is being used to fund the Pensions Component of competitive
outsourcing bids via the M Plan. This is a blatant misuse of monies derived from our
contributions and from contributions made on our behalf as part of the company's
salary programme to us when we were employed.

6. The Chairman and the Trustee Directors are not complying with their legal
obligations as regards disclosures to members nor are they sufficiently representing
the rights of pensioners with the Company.

With regard to how the above should be resolved I believe that our pensions should be
increased to the level of 100% of RPI backdated to 1997 when the company
implemented 100% Contribution Holidays and that we should get a commitment from
the company to pay increases of 100% annually for as long as it takes 100%
Contribution holidays.

Posted by Dave Mitchell on 27 September 2000 at 18:18:26:

In Reply to: Bullets for OPAS posted by Tom Heneghan on 26 September 2000 at 15:01:02:

In my letter to OPAS (sent the other day), as well as the issued I've already raised here, I metnioned another that might be of concern to those like me who retired recently (i.e. some time after the introduction of the M Plan in 1997). Here's what I said:

When IBM introduced the M Plan in 1997, it gave C Plan employee members the option of switching over. However it did not give us any indication of its intention of using the C Plan "surplus" to finance its contributions to the M Plan. The leaflets that IBM sent to employees when they introduced the plan speak of it being "funded by M Plan employee contributions, IBM contributions and whatever growth has been achieved by the fund". There is no mention of using "surplus" contributions to the C Plan to finance it. Given what has happened over the past three years, it seems clear that IBM will continue to do this until there is no "surplus" left and indeed that this has been its intention all along.

I need hardly point out that if it had signalled its intentions, quite a few C Plan employee members, myself included, might well have switched over, in order to ensure that their future contributions, including AVC contributions, were in a safer place. What IBM has been doing makes it much more likely that any future ex-gratia increases in C Plan pensions will not keep pace with inflation. Knowing this in advance would definitely have influenced my decision about whether to join the M Plan back in 1997.

Posted by Dave Mitchell on 28 September 2000 at 23:23:37:

In Reply to: Re: Bullets for OPAS posted by Pete Warren on 26 September 2000 at 21:26:27:

I posted a letter to OPAS on Monday of this week and received a reply from John Spencer today (Thursday). In his reply he says:

"Although OPAS has an e-mail address, members of staff regreattably do not have individual e-mail facilities on their PCs, so whilst I receive e-mails sent to this office, it is impractical to use this as a means of two-way correspondence."

I guess this may explain the delay in your receiving a reply and probably means it's best to use normal mail to communicate with them.

In his reply he also mentions that to date there have been about 35 IBMers submitting complaints to him.

Posted by B Mackenzie on 30 September 2000 at 14:09:55:

In Reply to: Re: Bullets for OPAS posted by Dave Mitchell on 27 September 2000 at 18:18:26:

I am just about to retire and "invest" many years of AVC contributions into C plan. I have no option other than to buy C plan rights. If I choose to leave MY money in C plan (which I don't think I want to now), it appears that IBM can and will give a proportion of it away to M plan members. Or maybe they only give away the proportion of C Plan excess funds that is related to the company contributions, which would mean that the rest of the surplus belongs to the members and can't be touched. Somehow I don't think that is what is happening.

Posted by Pete Warren on 30 September 2000 at 22:40:23:

In Reply to: Re: Bullets for OPAS posted by Pete Warren on 26 September 2000 at 21:26:27:

Received an email from John Spencer of OPAS asking for my home address so it looks as though email works. Just need to add home address to first communication.

Posted by Roger Burtenshaw on 17 October 2000 at 20:03:02:

In Reply to: Re: Bullets for OPAS posted by B Mackenzie on 30 September 2000 at 14:09:55:

Brian. Some points.

1. If you have an A Plan rather than a T Plan AVC, you are entitled to take the AVC as Cash, and then reinvest it wherever you wish.

2. With either A, T or no AVC, you can always commute the maximum to cash, and reinvest. The effect is the same as having taken the A/T as cash.

3. Although IBM will not tell you. Legally you do not HAVE to take the AVC at the same time as you take your IBM pension. You can take it later. But take Financial Advice first.

To answer your question. Once your AVC money gets converted into extra C Plan rights, the assets look the same as all other C Plan assets, and IBM appears to be determined to steal those.