Contents

  1. Letter to Kevin Waller, Pension Services Manager
  2. Attachment - Complaints to the Trustee of the IBM Pension Plan
  3. Covering letter to John Spencer, OPAS

Letter to Kevin Waller, Pension Services Manager

13 October 2000 
Mr Kevin Waller
Pension Services Manager
IBM United Kingdom Pensions Trust
PO Box 41 North Harbour
Portsmouth	PO6 3AU

Dear Kevin,

  • 1997 Definitive Trust Deed
  • 1997 Defined Benefit Deed
  • 1997 Defined Contribution Deed

Thank you for the above and the full 1999 Pension Report sent to me on 6 September 2000. My request dated 27 August 2000 asked for any subsequent amendments and I would be grateful if these can be sent to me.

Having read the above documents I believe the Trustee is not acting in the interests of the members and beneficiaries of either the C Plan or the M Plan. The attachment details some of the complaints I wish to have addressed.

My concern is that the Trustee is acting against the interests of C Plan members. The beneficiary appears to be the IBM company which has been allowed to take money out of the C Plan and to avoid making payments to the M Plan.

I would appreciate a response to the points raised in this letter and attachment.

A copy of this letter and attachment is being sent to OPAS.

Yours sincerely,
Dave Reid

Attachment - Complaints to the Trustee of the IBM Pension Plan

Three trust deeds written in 1997 established a new IBM Pension Plan joining the Existing C Plan to a new M Plan.

  1. Definitive Trust Deed (DTD)
  2. Defined Benefit Section (afterwards referred as the C Plan)
  3. Defined Contribution Section (afterwards referred as the M Plan)

Having recently obtained copies of these and noted the practice of IBM as shown in the 1999 Pension Plan Report I have the following complaints to make to the Trustee, IBM United Kingdom Trust Limited.

  1. M Plan:

    The M plan deed dated 24 April 1997 Schedule C paragraph 1(a) and paragraph 1(b) states that the employer shall pay contributions towards the Retirement Account of each Member. The Employer is failing to do this and is instead taking money from the C Plan fund.

    I contend that this contravenes Schedule C paragraphs 1(a) and 1(b) so that the Trustee is failing in his duty to the members of the M Plan.

  2. C Plan:

    The DTD in Part II paragraph 1 Power of Amendment states :- 'Nothing in this Trust Deed or in the rules shall authorise nor shall this Trust Deed or the Rules be altered or modified so as to authorise the transfer or payment of any part of the Fund in any circumstances to the beneficial ownership of any Employer.' In the 1999 IBM Pension Plan Report it is stated that the Company Contributions of £12.1M were funded from the C Plan surplus. Money was also transferred from the C Plan to the M Plan in 1997 and 1998. This contravenes the DTD clause quoted above.

    I contend that this contravenes DTD Part II paragraph 1(a) so that the Trustee is failing in his duty to the members of the C Plan.

  3. Conflict of Interest

    The interests of the M Plan members are that IBM should meet its obligations expressed in the M Plan Deed. The interests of the C Plan members are that the Fund established for their benefit should be used for their benefit and not siphoned off and used for the benefit of a different group. The establishment of two sections gives rise to a conflict of interest which the present single Trustee is failing to resolve.

    I contend that the Trustee is not acting in the interests of the members of either section. I further contend that this conflict can best be solved by a separation into two Funds, each with a Trustee and trustees dedicated to the interests of their specific members.

    There is a separate conflict of interest because the majority of trustees are paid servants of IBM, in some cases of IBM USA and the Trustee is a department of IBM UK. This makes them liable to pressure from IBM to promote corporate policies in preference to their duties as trustees and the interests of members of the Trust

  4. Expenses

    Part II of the DTD states that all costs and expenses incurred by the Trustee and any Employer in connection with the Plan and the Fund shall be paid out of the Fund. The accounts in the 1999 full Pension Plan Report on pages 10 and 18 show administration charges being levied on the C Plan and no such charges for the M Plan. Similar charges were made in 1997 and 1998.

    I contend that levying administration charges solely on the C Plan is unfair and an abuse of the duty of the Trustee to C Plan members.

  5. Fund Surplus

    The C fund has been stated by IBM officers to be in surplus. It was set up in Trust by IBM contributions and Member contributions for the benefit of the existing C Plan Members. It is money held by the Trustee for the benefit of Members and for their benefit only.

    I contend that the Trustee is neglecting his duties by not using such a surplus to increase and backdate pension increases and/or to issue a one time distribution to Members.

Covering letter sent to OPAS

13 October 2000 
To John Spencer
OPAS Ltd
11 Belgrave Road
London	SW1V 1RB
Subject IBM Pension Plans

I am a retired member of the IBM UK Defined Benefit Pension Plan known as the C Plan. I have concerns that the Trustee is not acting in the interest of the members of the C Pension Plan and have written to IBM about these concerns. The letter addressed to Mr Kevin Waller the Pensions Services Manager and Attachment is enclosed with this letter.

I believe that you already are involved in a number of cases concerned with this IBM Pension Plan (OPAS ref # 26121) and wish to add my concerns.

Please will you send me the necessary Forms to enable me to register my complaint. A previous contact was made with Bob Coldwell of OPAS ref DTH/CQ/5898 dated 21 July 2000.

Yours sincerely,
Dave Reid

Back to: Documents Contents