Newsletter No 19

 

22 Nov 2003

 

A request:  If you are an "E-mail Buddy", please print this newsletter and give it to your buddy.

 

The public situation with respect to the complaints and the Ombudsman is largely unchanged.   For once we are able to give some information on when there will be a determination.  The Ombudsman has said in conversation that it will be soon.  Since he was not obliged to say anything, we think this shows confidence that it will be soon (on the timescale of a complaint that started, in Mike Cawley's case, in August 1999).

 

The Ombudsman's Office has had approval to increase its resources by some 30% and it is issuing job advertisements.   This may be too late to protect IBM scheme members but it will lessen the previous pressure that was towards the expedient of producing determinations that favour companies, in order to reduce the chances of costly appeals to higher courts.

 

Hopefully the new resources will consign to history problems such as the Association of British Airways Pensioners (ABAP) has had.  They have spent fifteen months without even getting their complaint into play.  Firstly it was held up while the government considered and decided against allowing class actions.  (These are actions on behalf of a class of member.  The action IBM US recently lost was a class action.)  Now ABAP is held up by BA and the trustees claiming the Ombudsman has no jurisdiction because if the complaint succeeded it would help some members but adversely affect some other (uncomplaining) members.  That sounds like a ridiculous argument because if allowed it would keep the Ombudsman out of situations where dreadful things had been done, provided putting the dreadful things right would adversely affect some member.  A ridiculous situation or not, it is holding ABAP up.

 

The situation with Maersk is a piece of good news.  Previous newsletters have denigrated Maersk because it planned to wind-up a UK pension scheme even though the foreign parent Maersk had plenty of cash to keep it going.  The new news is that while the scheme is still going to be wound-up, Maersk will put extra funds in so that the scheme members don't suffer seriously from the wind-up.   Maersk said it had reached the decision voluntarily as it believed it was "now the right thing to do".  So maybe there is at least one ethical company in the world or maybe some executive was swayed by a year of campaigning from scheme members and a load of unfavourable publicity.   AMIPP hopes you have already seen this story in the press - Maersk deserves some good publicity.

 

The end of 2003 looks like being a busy time for those interested in pensions.   The Inland Revenue previously announced sweeping away a lot of its rules in favour of one rule that said you could have tax-advantaged pension saving anyway you liked until the total actuarial value of the various (non-State) pension entitlements you had accumulated reached £1.4M.  They also endorsed the government proposal to avoid "cliff-edge" retirement, so you could draw some pension and work part-time for the same firm at the same time.  The Inland Revenue's detailed document on this is due in the Autumn, which they define as going up to the solstice of December 22nd.

 

The Queen's Speech  (Nov 26th) is expected to describe a new Pensions Act.  Although the speech itself will not have much detail, the rules of the game say that there will be a detailed document behind it.   There is currently much activity just below the surface in the Department of Work and Pensions, in the planning departments of the regulators, and with government solicitors and those who draft regulations, to put the document together.

 

 

Documents added to the website since the last newsletter give some impression of government activity:

A typical response from the Department of Work and Pensions.    This is the an example of the sort of letter you ultimately get if you write to your MP, along with some AMIPP commentary.

A report on a visit to the Minister for Pensions.   This is not specific to IBM but describes how personal approaches work.    

The political parties are beginning to gather themselves for inventing manifestos.  There is pamphlet from David Willetts, MP to many of you, that is more informative and readable than most.  Did you know that the Victorian prime minister Palmerston is supposed to have died at the age of 82 on the billiard table, in flagrante with a maid?  (Since one cannot libel the dead, it is not clear why Willetts bothers to say "is supposed to have")

All this attention to pensions is not limited to the pensions industry, it is reflected amongst the consumers.  Nine out ten people now know whether their occupational scheme is final salary or money purchase, compared with 43% last year.  There are indications of realism as well as interest - the National Association of Pension Funds claims that employees are now more willing to increase their pension contributions rather than have their final salary scheme closed.  (Those fortunate employees that, unlike IBMers, are given some involvement in such decisions)

Information on the financial strength of IBM UK pension funds will not be available until the actuarial report in 3Q 2004.   Meanwhile there are surveys suggesting that companies are preferring to make optimistic assumptions about future rates of return, rather than make contributions to bring funds quickly back from deficits.

 

For those of you deliberating whether your expertise will be in demand in the UK, there may be some relevance in US statistics suggesting that although a quarter million computer jobs will be exported from the US by 2010 that will be less than the new computer jobs generated in the US by that time.  (Although current prospects for IT workers are not that good.)

 

Would you feel comfortable working for a company that was forced by a legal ruling to rehire you after sacking you?  It probably would not give you confidence in your career prospects.  IBM US sold off Endicott plant in much the same way as IBM UK sold off Havant and the staff were not treated as well as the Havant staff were, and the link describes somebody having their job restored, against the company's wishes.

 

One website for a scheme members' association, similar to AMIPP's, received the following request: The Company and the Trustees request that the following text is clearly put on each page of the website so that it is clear that the views are ROPA's and not ours:  "Royal Ordnance plc, BAE SYSTEMS plc and the Scheme Trustees have not edited this website.  They disagree with some of the content and opinions expressed by ROPA on this website"

 

ROPA did not agree to the request.

 

It is hardly likely that any readers of an AMIPP Newsletter are confused about the AMIPP website origins.   IBM UK and the Trust were offered editorial control of some pages on the website from early days, and they declined.   Although they have not been supportive of the website, they have not been antagonistic in the way that ROPA's company and trustees were. 

 

Some non-UK news:

 

IBM South Africa and its scheme members remain in conflict.   One article demonstrates the remarkable similarities with IBM UK.  (And demonstrates that individual trustees are more free to express their views than those of the IBM UK trust.)  The South Africans have improved the legal protection for scheme members in recent years but the regulations previously were very permissive about company behaviour so a second article suggests the members are going to make little progress against the company lawyers.

 

IBM offices in South Korea were raided in connection with bribery allegations.

 

IBM US was hoping that new legislation would allow it to bypass the legal ruling against its cash-balance plans.  This has been delayed, at least until October 2004.   Xerox, in similar fault to IBM over its cash-balance plans, has settled its dispute with employees by paying an additional $239M, rather than continue the legal battles.
 

 

 

 

 

 

 

Over a period, AMIPP has lost contact with a number of people, listed in Lost Members.  They might have changed their email address and not told us, or they might have lost their jobs and no longer have an email address. If you can help by reminding them of the need to re-register, or by being an "e-mail buddy" for them, please do.

 

 

AMIPP, the Association of Members of IBM UK Pension Plans       www.amipp.org.uk