17 March 2002
Dear member registered with
IBM C-Planners' Web Site.
You
are receiving this Newsletter because you have registered with us. If you do
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This newsletter
describes some articles that have been added to the website since the previous
newsletter, repeats two messages that the Ombudsman's Office has sent to our
message board, notes the recent media attention on pensions, reports on efforts
to communicate with the government, and describes one relevant legal case.
A short
amalgamated summary of complaints has
been prepared.
An article on
establishing the arrangements for electing
trustees, and the elections themselves, has been added. This was timely when written because the regulations
originally gave a lifetime of six years to the arrangements and that was about
to expire. However, six years proved
insufficient to make needed improvements to the regulations so that job has
been added to the Pickering agenda.
(The Pickering Review is described in Newsletter
Nine ). This is regrettable
because, although it does not alter the three-yearly cycle of elections for IBM
trustees, it means the next batch elected will operate in the same
unsatisfactory context as previously. A
lot of irretrievable harm can be done in nine years.
There is a
report on the London Retiree club AGM. One topic there was whether the Management
Information Letter 785 Q&A 7 meant what you thought it meant. A painstaking analysis of that question can
be found in a complaint supplement. There is also a
report on Hursley Retirees Club AGM 2002
The
View from Westminster has been updated to add quotes from Steve Webb
MP (LibDem spokesman on pensions).
There has been
two messages from the Ombudsman's Office sent to the website message
board. They are short enough to
include here in full.
"I've received various enquiries about when our
office will start investigating the IBM complaints. We are only a small office-
presently 10 investigators (one part time), one Ombudsman and some support
staff (of which I am one). The complaints are still awaiting allocation to an
investigator but bearing in mind that we receive over 3,000 complaints a year
you will understand that we're a bit stretched. We are acutely aware of the
position and these complaints are "top of the queue". Sorry
everyone."
"Just to say that all the complaints made to the
Pensions Ombudsman have now been passed to our Special Legal Investigator,
Sarah Jacobs. No doubt Sarah will be contacting the complainants in due course.
Sarah is not based in this office, so it is better to write to her rather than
telephone!"
It is obviously good that the Office is willing to
tell us what it reasonably can. We
should not expect concrete predictions of progress. Drawing on experience and on other things the Office has said
(non-confidentially), we speculate that the time to go before resolution is of
the same order as the time the complaints have been with the Office. (That period is since mid-2000 for the
earliest, mid-2001 for the majority.)
Extra time will be added if there are appeals to higher courts, and
where complaints are resolved serially.
We suggest you do not write letters suggesting the
Ombudsman should hurry up. The easy
way for the Ombudsman to get quicker resolution would be to produce a
determination that placated IBM and thus avoided an appeal. We do not want a quick answer at the
expense of the right answer. Letters
to your MP or the Department of Work and Pensions suggesting more resources for
the Ombudsman's Office looks like a good idea, for the long term. Some responses to the Pickering
consultation (see Newsletter
Nine) have made this point about resources.
You will have noticed a flurry of media attention to
"The Pensions Crisis". This was mostly
about how bad the situation was, and the "stealth tax" on pension funds was
widely denounced. Where there was
analysis of the background, much of it had a corporate agenda - requests for
deregulation and for delaying the revealing accounting rules of
FRS17. (Note that does not apply to us - IBM UK
uses a US accounting standard, FAS 7).
There was some discussion of the weak position the consumers of
occupational pensions are in, and of hopes for the current reviews of the
regulations. The flurry of interest is
subsiding but it may have an effect on how much, or how little, the Pickering
review will lead to, for the consumer.
The Observer 10/3/02 put it as "Reviews? It's time for action on
pensions. We have had a decade or more of rhetoric about saving, to little
effect. The Government cannot shirk the
need for deeper change."
In Newsletter Nine we described your opportunity to
influence the Pickering Review. We have
been told of a response nationally of more than 100 submissions. The submitters were told their input was
public unless they said otherwise. We
have not been able to find out the views of submitters - there is only a
statement that the submissions "may be" (one day) available for inspection. Could it be that the reviewers do not want
accountability for divergence between the submissions and their
recommendations?
You may have noticed, from the message board, the
creation of the Association of Members of IBM UK Pension Plans (AMIPP). This is related to the indications (e.g.
from the six year failure to improve the position of elected trustees and from
the membership and agendas of reviews) that the government has been giving
little weight to the views of consumers.
A recent Department of Work and Pensions request for opinions had an
addressee list of 27 institutions, only 4 of them representing some consumer
interest as opposed to provider interests.
One of the 4 was the Confederation of Occupational Pensioners
Associations (COPAS). AMIPP has become
a member of COPAS.
AMIPP is a properly formed association, with rules
and officers etc. You are not being
asked to join it. This is because the
services that AMIPP can provide for you (providing information, newsletters, a
message board to exchange views, making submissions reflecting those views) are
all already being done freely and electronically. AMIPP has decided against the added complications of maintaining
lists of home addresses, which would come with having subscriptions. No need for raising large sums of
money has been identified. The funds currently required have been
donated.
The rest of this newsletter is about legal
concerns. A recent case has added to
the precedents about the employer's duty to maintain trust and confidence in
employee and retiree relationships.
This is also known as an obligation of "good faith". The case is complicated, and only a part of
it is about "good faith". [Hagen & ors v ICI
Chemicals & Polymers Ltd & ors See http://www.incomesdata.co.uk/brief/fore699.htm
]
The relevant part is described as saying "In one
aspect - relating to pension rights - ICI were judged to have been negligent in
relation to the information provided to the employees. The company had not
adequately communicated to the employees the fact that some of them could lose
out on pensions in the future. That information was available to the employers
and they had chosen not to pass it on."
As well as confirming that employers have a duty, and
that it applies to pensions, this case has parallels with ours about
information not being passed on.
Specifically, it is
alleged by some complainants that, unknown to the potential
retirees, by 1990 IBM UK was already operating a mechanical rule for degrading
the value of pensions by 30% of RPI changes, irrespective of economic
conditions and the practice of other companies.
People will have differing views of this, including
"diabolical" and "hard luck, that is how corporations work", but one of the
things the Ombudsman will give a view on is whether the "good faith" aspect of
the law provides any protection for us.
If it doesn't, in this extreme case where the potential retirees were
left to expect "one of the best" when the company knew its practice was going
to be "one of the worst", it is hard to see how the good faith law could ever
be effective.
Retirees are particularly dependent on good faith
because when they retire they have paid in full their side of the bargain and
have no bargaining power remaining. As
the referenced brief says, "Employment is, at its heart, all about trusting
people".
Yours
sincerely
The
C-Planners Group
Newsletter
distributed by Mike Eacott (Membership secretary for the C-Planners' Group)
Personal footnotes
1.
As was
the case for previous newsletters, I am the distributor of the newsletter but
not the sole contributor. A small group produces the newsletters.
2.
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Thank you
Mike