Posted by Peter J Smith on 01 November 2000 at 06:13:16:
I have sent the following letter to OPAS:
December 1, 2000
Although I am an overseas resident, I am still a UK taxpayer as I receive a Company Pension from my former employer, IBM UK. I want to raise with you the manner in which IBM UK has merged the funds of two of its pension schemes to the detriment of many of its former employees now in retirement. This matter has, I believe, been raised with your office by other retirees in the UK and I want to add my concern.
I worked for IBM in the UK for 19 years, contributing to what is known as the C-Plan. I drew my pension in 1994. In 1997 a new scheme known as the 'M-Plan' for current and new employees was introduced, to satisfy new legislation. Thereby, future IBM pensioners are to be granted annual increases to their pension equivalent to 100% of the going retail price index or 5% of their pension whichever is the smaller.
However, C-Plan pensioners, such as me, receive 'discretionary' increases from the pension fund on an 'ad hoc' basis equivalent to only 70% of RPI. This being done while the fund is in surplus.
The success of the investments made by the Trustees of the C-Plan pension fund has enabled IBM to take a 'contributions holiday' over recent years. While this may be allowed, I believe the cross subsidy of the M-Plan from the C-Plan surpluses is morally wrong and not permitted within the legislation.
Please note my interest in this matter. I also look forward to your views and proposed action.
Yours Sincerely
Peter J Smith