[January 06, 2006] TMCnet.com
IBM pension threat after US scheme closure
(Evening Standard (London) (KRT) Via Thomson Dialog NewsEdge) Jan. 6--Some 20,000 British workers at IBM are facing the closure of their gold-plated pension schemes.
If IBM UK, one of Britain's largest private-sector employers, follows its US parent in closing the final-salary scheme, it will be one of the biggest blows in the escalating attack by blue-chip companies on workers' retirement benefits.
Creaking under the weight of a $7.4 billion (4.2 billion) pension deficit, the computing giant, headed by Sam Palmisano, has said it will stop contributing to its defined-benefit final-salary retirement schemes for US workers.
Employees will be moved on to potentially poorer-paying "money purchase" schemes, where retirement funds are based on the vagaries of investment performance rather than length of company service and pay levels.
It appears likely IBM UK will follow suit.
A spokesman for the company, which has a big presence in London and the South, admitted: "Changes are under consideration worldwide and in the UK."
IBM UK is understood to run several schemes with attractive perks, which almost all of its 20,000 workers are likely to have signed up to. ......