In Reply to: Re: Discretionary Increases posted by Dave Mitchell on 16 February 2006 at 15:57:21:
In March 2002, in my IDRP Stage 2 Complaint I wrote (complaint 1(d)):
"It's also worth noting that IBM has become far less generous in recent years over such matters as 25 year club benefits, leaving benefits, health insurance benefits (which used to continue up to normal retirement age for early retirees) and company car and fuel benefits. It has also removed the London Allowance and annual bonuses from pensionable earnings.
Since the transfers have the effect of reducing the surplus, it seems plain to me that if at any time the surplus were to disappear, and IBM was therefore forced to contribute to the fund, it would use this to justify giving ex-gratia increases that were smaller or less frequent, or both."
The reply from Barrie Morgans - then Chairman of the Trustee, said:
"You state that "the implication of IBM's intention was that future ex gratia increases in C Plan and M Plan pensions were likely to become less and less generous as the surplus diminished". Your comments in relation to pension increases in the future are speculative and are not borne out by the history of pension increases to date. In addition, as Mr Newman pointed out, an allowance for pension increases is made before the "surplus" in the Plan is calculated."