Re: The oxygen of Publicity

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