From the Message Board - 20 September to 9 October

Posted by Roger Burtenshaw on 20 September 2000 at 20:49:29:

As members were/are required to contribute 3% towards the C Plan, whilst IBM has been allowed to take several 'holidays', surely IBM does not the authority to raid the assets without the overt permission of the contributing members?

A previous note suggests that the Barclays fund was a non contributory arrangememnt for employees.

Posted by Pete Warren on 20 September 2000 at 21:50:00:

I thought the employee contribution was 4%, apart from those occasions when there was a reduction when the plan was in surplus.

Posted by Dave Mitchell on 20 September 2000 at 23:13:31:

Clearly IBM must maintain that the two sections are part of the same scheme, since it has not applied for permission via OPAS to remove funds from the C Plan (Defined Benefits) section. But there's another way of looking at this.

IBM has to contribute each year to the M Plan (8% of salary for each employee member). So it should have contributed in 1999, 1998 and 1997. There's no record of this in the IBM balance sheet of course, how could there be, since IBM didn't make any contribution - it took (most of) the required money each year from the C plan "surplus". But surely this means that IBM is failing in its statutory duty to put defined amounts of money into the M plan.

It seems to me the only way that IBM can claim it's putting ITS money into the M plan - as it's required to do - is admit that it's doing what we claim - taking money out of the C plan (so it becomes IBM money) and then putting it into the M plan. But this means admitting that they've broken the OPAS rules - n'est ce pas? Even if they maintain that they are putting it back into the same scheme, they still have to admit that (for a short while) they illegally took it out.

Posted by Roger Burtenshaw on 21 September 2000 at 10:10:46:

My mistake, you are correct with 4% contribution level.

I don't think that the A/T plans are relevant.
-Isolated unique funds. not in C Plan pot.
-Not accessible to IBM.

However, if current employees require another issue to get concerned with.
I believe that the A/T plans are with Equitable Life, who have just lost the court case to avoid paying Guaranteed benefits from their With Profits Pension Fund.
Equitable Life have declared that that they will fund the guaranteed benefits by reducing the annual and terminal bonuses to people with non guarenteed policies. ie our A/T Plans!

Question, are the Trustees again failing by placing (or leaving) the A/T funds with Equitable Life?

Posted by Pete Warren on 21 September 2000 at 19:10:56:

: My mistake, you are correct with 4% contribution level.

: I don't think that the A/T plans are relevant.
: -Isolated unique funds. not in C Plan pot.
: -Not accessible to IBM.

: However, if current employees require another issue to get concerned with.
: I believe that the A/T plans are with Equitable Life, who have just lost the court case to avoid paying Guaranteed benefits from their With Profits Pension Fund.
: Equitable Life have declared that that they will fund the guaranteed benefits by reducing the annual and terminal bonuses to people with non guarenteed policies. ie our A/T Plans!

: Question, are the Trustees again failing by placing (or leaving) the A/T funds with Equitable Life?

The internal docs that have been distributed recommend that money
is left with Equitable Life because of the penalties that would
be incurred by withdrawing it. No new money is being invested in
Equitable. Members of the scheme were being asked what to do
with contributions, ie not make any or invest in the other company.

Posted by J M Howell on 23 September 2000 at 22:48:57:

If you look in my letter to Mr Newman, you will see that question 2a clearly asks the question about using surplus money to establish the M Plan. the answer is also posted on the web site, it states that they did use the surplus. If you also go to question 3 I ask about legal advice. This was done because before establishing the M Plan they needed legal advice to see if they could do it. Guess what the answer was. Now we get to the bit that really winds me up. Having taken the advice, using our money (surplus) they then change the 'Deeds' to ensure that they are now home and dry.

Posted by Brian Thubron on 09 October 2000 at 21:36:08:

When IBM employed me in 1965, I was told that my remuneration package not only included salary but also benefits i.e. pension and insurance. Later, as a manager, I was often instructed to relay to the troops that their remuneration consisted of salary plus benefits. (Usually in times of low or no increases) In addition when the salary comparison figures were produced to show how IBM was in step with comparable companies', benefits were also part of the argument. If the contributions made to the pension fund by the company were part of my annual remuneration then these contributions plus the contributions made by me were mine! Collectively the contributions to the pension fund belong to the members, both active and retired. Any surplus generated by our money is ours. This wasn't some charitable gesture by the company on our behalf this was money we earned