Re: Posted by Worrier on 09 May 2004 at 15:53:12:
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"1. Could IBM UK Pension Trust Limited wind up the pension scheme and assign the fund value to pension plan members to be managed. This could be a problem to members if the fund at that time will be in deficit and unable to meet its liabilities.
The latest valuation was done in 2001 based on the value at 31 Dec 2000 when the report to members published in 2003 stated that the assets were sufficient to meet the liabilities.
The year end values of the fund as published were:
Year end 2000, value of plan £M 4089.7, 2001 £M 3676.6, 2002 $M 3056.4.
Year 2000 continued on from year 1999 to be a good year for equities (47.3% of the fund), year 2002 turned out to a very bad year.
The market recovery since 2002 to date would possibly make the value of the fund at some £M 3500. Is this enough to meet the current liabilities?"
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The estimate of £M 3500 was slightly optimistic as the value of the fund at end 2003 after company contributions of £79m in 2003 is stated in the report as £M 3544.1 .
However the 2003 report stated "the fund now has a large deficit" whereas December 2000 valuation (of £M 4089.7) "fund was in surplus".
So how many years has the fund been in deficit?
Year 2001 £M 3676.6 (no, 2001 report states "sufficient to meet .... liabilities), 2002 $M 3056.4 (in deficit, as stated in the 2002 report), 2003 £M 3544.1 (large deficit, as stated in the 2003 report).
Has the Trustee has been negligent
in allowing the fund to be in deficit for 2 years or were they just hoping for such a big recovery in asset values that the fund would meet its liabilities?
Or did the Trustee tell IBM to make significantly more annual contribution
than IBM actually did?
We are being treated worse that children and are not being, and have never been told, what the actual deficit has been. (So what's new?).
Given the uncertainty in the growth of the North American, UK and European equities comprising most of the fund, it is likely the by year end 2004 even after the company contribution of £157m, the fund will still be in deficit.
So the risk of the scheme being wound up continues.