Here are some things within the "It's your pension" document (from the Pensions Trust, August 2002) that are worth analysis.

The final sentence of section with dark green heading says the trustees "have a responsibility to act fairly and equitably towards all pension plan beneficiaries and, therefore, have responsibilities identical to those of the other Trustee Directors of the Trustee Board."

Nobody quarrels with the main sense of that, but there is contention about what the word "all" means in that context.   Does it mean all and only the current members or does it mean the current members plus the people that might (or might not) be members in the future?   This is a question we can hope to get guidance on from the Pensions Ombudsman.

If you take the "current members only" point of view, then the trustees misunderstood their role when the M-plan was introduced.  See Dave Reid's analysis from the early days.

If you take the "current and future in all plans" point of view then it is possible to argue some element of balance in the introduction of the M-plan.   The C-plan members suffered from a new way of taking money out of the C-plan reserves.  The M-plan members suffered because the M-plan is worse than the C-plan.  Some thousands of Fixed-Term-Contract employees gained because they were eligible for the M-plan.  (We don't know why the latter were not eligible for the C-plan.)  So it could be argued that the benefit to the potential new members balanced the detriment of the other members.   (Although it should be said that the responses to the complaints which are on this website do not contain that argument.)

The section with a Burgundy heading says "Under the Trust Deed and Rules, the Company has established pension plan members' benefits; the responsibilities of the Trustee Directors do not encompass determining or negotiating these benefits."

There are a number of partial truths bound up in this sentence.  The deeds do establish some characteristics of the benefits, but only some of them, and those can be changed by amending the deeds.  The trustees do control amendment to the deeds.

Where the deeds do not address a benefit characteristic, that characteristic is determined by the bargain between the employers and each employee during the time they were employed.  In IBM's case the deeds say nothing about Pension In Payment (PIP) policy (other than allowing for reviews of increases "from time to time") so that characteristic stems from the bargain.  This was expanded on in our comments on the document you received in 2001.

The issue of trust involvement in "determining or negotiating" is one of the meaning to be attached to those words.  The 1994 Actuarial Report says

 "The allowance for future discretionary increases to pensions in payment is to enable the Trustee and the Employer to continue their discretionary practice of periodically granting increases to non GMP pensions in payment."

  That might sound to you like a joint effort, but it is reasonable to argue that the Trustee does no "determining" because IBM U.S. has the final signoff on increases.  (Although Unions talk about "negotiating" salary increases in circumstances where the company has the final signoff, they don't talk about "determining" them.)

The word "negotiating" is open to interpretation.  (For example, do you "negotiate" with the family about where the family goes for its holidays?)  The Trust and IBM have an ongoing relationship involving many decisions.  The Trust has some powers, IBM has some powers.  On a particular decision, the Trust has an obligation to take into account relevant previous outcomes.

  Some judges have talked about negotiation when it comes to the use of "surplus":

 "The consent of the employers would be obtained by negotiation.  In those negotiations the employers could be expected to have regard to their own interests - which (in turn) could be expected to include a desire to maintain good relations with their employees - and the trustees would be required to negotiate on behalf of the employees, pensioners and their dependents." (Legal reference [1999] 4 All ER pp 546- 582)

 However, we know that in Trust Law a different judge, looking at different deeds, might see it differently.

Undoubtedly the Trust provides input to IBM with the intention of influencing IBM (why else do it?) and IBM communicates its plans and potential plans (eg about salaries) to the Trust with the intention of influencing what the Trust does.  Whether the interplay of these exchanges over time amounts to "negotiation" is a word choice.

Also in the Burgundy section is the statement that a trustee when reaching a decision should not take into account their personal views.   Some might say that the reason they are there is to bring to bear their personal view after taking all factors into account.   Is some distinction being made between "personal" views and "individual" views?

The first paragraph from Jim Lamb says "The requirement was for one third of the Pensions Trust Board to be made up of MEDs:..."  The words in the 1995 Act are "at least one-third of the total number of trustees"

You may think it is obvious what that means - that the total number of trustees must not exceed three times the number of MEDs.   The regulatory body, Opra, has given guidance that that is the interpretation of the Act to be made.

However, the Articles of Association of the Pensions Trust have a different view of what one-third means.   They say:

"A minimum of one third (rounded down to the nearest whole number) of the Directors shall be Member Elected Directors unless there is a lesser number of persons to be appointed as Member Elected Directors under the Selection Arrangements or a vacancy or vacancies shall have arisen in their number which shall not have been filled."

By that rounding down rule, 3 elected directors amongst a total of 11 would be acceptable.

This is hardly a practical concern to us, since the 4 amongst 12 has been repeated often enough to be an obligation.   However, it does illustrate IBM's determination to have every possible little legal edge over the members.

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