Posted by Mike Barratt on 16 February 2001 at 21:58:40:

From my experience in the communications 'bit' of IBM I know that the company abhors (and tries to avoid) bad press.

I believe that we should move toward a campaign of open communication on this subject. I am prepared to get involved with any legal activity that might force IBM to recognise that what they are doing is immoral and damaging to ex-employees' interests. Remember, we used to be called 'the company's greatest asset'.

Anybody out there want to form a communications working party?

Mike Barratt

Posted by AC Planner on 18 February 2001 at 13:58:41:

In Reply to: The oxygen of Publicity posted by Mike Barratt on 16 February 2001 at 21:58:40:

I too am beginning to think it about time that representation from this group pressed the UK Pension Fund manager for a formal response. But, the decision will not be his, it will no doubt be in Armonk.

Remember the Hoover Saga and the free flights? Publicity did bring about change, and while I was an employee, I paid my 4% and I believe we are morally entitled to out 5%/100%RPI increases since the fund has such a large surplus.

Posted by George Cuthbertson on 19 February 2001 at 10:19:29:

In Reply to: The oxygen of Publicity posted by Mike Barratt on 16 February 2001 at 21:58:40:

I have been keeping in touch with various discussion threads which on the
whole seem well balanced and constructive. This said, I feel that this
thread proposes the best course of action to achieve the desired result.

It seems to me that the question of legality is one we are unlikely to win.
IBM have a track record of success in handling adverse litigation and this
looks like a pretty murky legal quagmire. The Barclays ruling serves to
demonstrate how difficult it will be to win the legal argument. Using the
ombudsman is still the right thing to do however - it may get a result but
if it doesn't then it can be used to bolster the moral argument.

Where I take umbrage with IBM is that they are removing funds from the
C Plan surplus while at the same time treating retirees poorly. If IBM had
changed the C Plan to guarantee annual increases of RPI/5% then I don't
think there would have been any of the current backlash. As long as they
treat the retirees well then I have no objection to IBM using all legal
means to improve their financial results, including movement of surplus
pension funds.

I agree with Mike Barratt that the best way to influence IBM's actions is
to get as much adverse publicity into the public domain as possible -
letters to the press, articles in the quality press, television consumer
programmes, etc.

By all means pursue the legal and political routes - if nothing else it
seems that the law should be changed to bolster pensioner rights even
more - but this is a long and very slow process. The best chance to get
a quick result is to go public very loudly.

Posted by The Man From Ballinasloe on 19 February 2001 at 14:26:53:

In Reply to: Re: The oxygen of Publicity posted by AC Planner on 18 February 2001 at 13:58:41:

I've got a nice bumper sticker............

IBM The Great Pension Heist IBM

Lou, You ARE the weakest link, Goodbye

It looks good and has attracted some comment.

Posted by a current employee on 21 February 2001 at 16:30:30:

In Reply to: Re: The oxygen of Publicity posted by The Man From Ballinasloe on 19 February 2001 at 14:26:53:

Surely it is time to use 'popular' approaches to the main
problem as well as the formal complaint to the ombudsman.
The correspondence on the website with UK IBM executives, with
inadequate responses, says that popular approaches
(eg TV consumer programmes, a frank approach in your
discussions with the press) will not be taken because we still
have a loyalty to IBM and do not want to wash dirty linen
in public. The time may have come to ignore these
considerations, if that would enhance the chances of success.

Posted by Nigel Foster on 22 February 2001 at 22:07:35:

In Reply to: The oxygen of Publicity posted by Mike Barratt on 16 February 2001 at 21:58:40:

Steps are being taken which will ensure publicity - at the very least a "shot across the bows" which might make IBM retreat to an acceptable position on the grounds that by so doing it will be better commercially for IBM.

What we have to avoid is a jihad - we just want a result! A question: If IBM formally ceded limited RPI would that be enough? What will we settle for? All views welcome.

Posted by A C Planner on 23 February 2001 at 19:55:48:

In Reply to: Re: The oxygen of Publicity posted by Nigel Foster on 22 February 2001 at 22:07:35:

Now as a retiree, I would be satisfied with increases of the lesser of RPI or 5% paid annually. If IBM ageed to this proposal, then I would not be concerned with what they did to the surplus provided the agreement was irrevocable. I would not want the agreement made, the full surplusses asset stripped, and then lower increases implemented in a few years time!

Posted by Dave Mitchell on 24 February 2001 at 10:17:49:

In Reply to: Re: The oxygen of Publicity posted by A C Planner on 23 February 2001 at 19:55:48:

Let's be clear about this. In the past (e.g. 20 years or so), the ex-gratia increases awarded by IBM have been approximately 75% of RPI. There have been instances of increases over 10% (when inflation was even higher). There have been lengthy periods when the increases were 80% of RPI.

Post 97 pension contributions by law give you LPI (RPI or 5%, whichever is lower).

IBM has lately been giving 70% of RPI, but it's not clear what would happen if RPI went above 5%. All the signs are that IBM would stick at 3.5% (70% of the 5% LPI limit). IBM is mean these days.

IBM has never guaranteed ANYTHING in the way of ex-gratia increases.

So what is that would satisfy you:
1. a guarantee of 5% or RPI which ever is lower?
2. a guarantee of 70% of RPI?
3. some other guarantee?

Dave

Posted by Bryan Balfour on 25 February 2001 at 12:12:47:

In Reply to: Re: The oxygen of Publicity posted by Dave Mitchell on 24 February 2001 at 10:17:49:

: Post 97 pension contributions by law give you LPI (RPI or 5%, whichever is lower).

Very true, but who do you think pays for it. A 'money purchase' pension means precisely that. Whatever the employee's and employer's contributions roll up to when the employee retires is used to purchase an annuity. This could be a fixed amount with no increases. Instead, with the new legisation, increases up to 5% of RPI are guaranteed. Consequently a portion of this money is held back to fund these increases. The net result is that the pension paid is smaller. These increases are NOT being paid from any 'surplus' in the fund as, with a money purchase scheme, there isn't a surplus. Please correct me if I've got this wrong.

: IBM has lately been giving 70% of RPI, but it's not clear what would happen if RPI went above 5%. All the signs are that IBM would stick at 3.5% (70% of the 5% LPI limit). IBM is mean these days.

Unlike the 'money purchase' scheme in which the increases are built in, with the 'final salary' scheme pension increases are paid for out of the 'surplus' in the fund; the same fund from which existing employees, who are in this scheme, will draw their pensions when they retire. They too, I'm sure, would like to think that their pensions will increase just like existing pensions have.

: IBM has never guaranteed ANYTHING in the way of ex-gratia increases.

To do so would not be very business-like. To commit to funding such increases based on an index (RPI) over which it has no control whatsoever would be a pretty stupid thing to do, don't you think?

: So what is that would satisfy you:
: 1. a guarantee of 5% or RPI which ever is lower?
: 2. a guarantee of 70% of RPI?
: 3. some other guarantee?

I would be satisfied with a public statement from IBM to the effect that it will continue with ex-gratia pension increases based on a minimum of 70% in the increase in RPI unless unable to do so DUE TO CIRCUMSTANCES BEYOND ITS CONTROL. This, I feel, would satisfy those who are concerned that the C plan is being bleed to the point that ex-gratia increases could no longer be paid. It won't, of course, satisfy those who somehow think that all the money in the fund belongs to them.

Posted by Dave Mitchell on 25 February 2001 at 16:29:51:

In Reply to: Re: The oxygen of Publicity posted by Bryan Balfour on 25 February 2001 at 12:12:47:

Brian I was just trying to lay out the facts. I agree with much of what you say. On one point you are wrong however. You say:

"Unlike the 'money purchase' scheme in which the increases are built in, with the 'final salary' scheme pension increases are paid for out of the 'surplus' in the fund; the same fund from which existing employees, who are in this scheme, will draw their pensions when they retire. They too, I'm sure, would like to think that their pensions will increase just like existing pensions have."

This is not exactly true. IBM has publicly said that it will underwrite the costs of LPI. It made great play of this back in 1997. Of course it was a safe bet since it knew back then that the surplus was big enough to give it a 5 year contribution holiday at least AND pay for the M Plan contributions AND pay for LPI.

Anyway, if the surplus goes to zero IBM will have to pay for LPI. Existing employees therefore have nothing to fear regardless of what happens to the surplus or indeed who gets it.

Dave

Posted by George Cuthbertson on 01 March 2001 at 15:41:26:

In Reply to: Re: The oxygen of Publicity posted by Bryan Balfour on 25 February 2001 at 12:12:47:

: : So what is that would satisfy you:
: : 1. a guarantee of 5% or RPI which ever is lower?
: : 2. a guarantee of 70% of RPI?
: : 3. some other guarantee?

: I would be satisfied with a public statement from IBM to the effect that it will continue with ex-gratia pension increases based on a minimum of 70% in the increase in RPI unless unable to do so DUE TO CIRCUMSTANCES BEYOND ITS CONTROL. This, I feel, would satisfy those who are concerned that the C plan is being bleed to the point that ex-gratia increases could no longer be paid. It won't, of course, satisfy those who somehow think that all the money in the fund belongs to them.

I would like IBM to make a formal legally-binding commitment
rather than just a public statement. My feeling is that there is
a stronger rationale supporting RPI or 5% since this is what now
applies. I am short of some data though :

Does anyone know whether the current surplus would be enough, too
much or not enough to cover this commitment? Given that the C Plan is closed it ought to be possible for an actuary to calculate. If it is too much then there is still scope for IBM to fund M Plan for some time at least and still satisfy their moral obligations. If there is not enough then our case would be weaker and would need an unlikely measure of generosity from IBM.

I think it is important to know this before deciding on what to ask IBM for - does any know the answer?