Posted by Dave Mitchell on 27 September 2000 at 18:18:26:
In Reply to: Bullets for OPAS posted by Tom Heneghan on 26 September 2000 at 15:01:02:
In my letter to OPAS (sent the other day), as well as the issued I've already raised here, I metnioned another that might be of concern to those like me who retired recently (i.e. some time after the introduction of the M Plan in 1997). Here's what I said:
When IBM introduced the M Plan in 1997, it gave C Plan employee members the option of switching over. However it did not give us any indication of its intention of using the C Plan "surplus" to finance its contributions to the M Plan. The leaflets that IBM sent to employees when they introduced the plan speak of it being "funded by M Plan employee contributions, IBM contributions and whatever growth has been achieved by the fund". There is no mention of using "surplus" contributions to the C Plan to finance it. Given what has happened over the past three years, it seems clear that IBM will continue to do this until there is no "surplus" left and indeed that this has been its intention all along.
I need hardly point out that if it had signalled its intentions, quite a few C Plan employee members, myself included, might well have switched over, in order to ensure that their future contributions, including AVC contributions, were in a safer place. What IBM has been doing makes it much more likely that any future ex-gratia increases in C Plan pensions will not keep pace with inflation. Knowing this in advance would definitely have influenced my decision about whether to join the M Plan back in 1997.