The Association of Members of
IBM UK Pension Plans (AMIPP)
AMIPP repeats its "No Windup" assessment. (This page updated 24 Sept 2004)


This page has been instigated by a series of media stories speculating on IBM's pension intentions.

AMIPP has said "Although IBM has the power to wind-up (and the Trustee has that power also), the scheme will not be wound up while IBM stays solvent and financially astute."

There appears to be one original media article and various rehashings of it. The article claims to have found some foundation for its content on the AMIPP website. There is no such foundation; AMIPP has not suggested it knows of IBM's plans and neither has the chairman, Brian Marks (in any capacity).

Various aspects are covered in more detail within messages on the message board. AMIPP's discounting of windup is not based on an assessment of goodwill from Sam Palmisano and his executives, it is based on the UK regulations and the insurance market.

It is of course possible that IBM is planning changes and it is highly likely that IBM, like every other pension sponsor with a final salary scheme, has given some consideration to potential changes.  However, AMIPP knows of no public facts about IBM's intentions beyond the weak and indistinct position recounted in the 2003 Members' Report.

It is reasonable for scheme members to be concerned, in the light of hardships which some members of other UK schemes have suffered recently.  Concern will have been heightened by the facts that our scheme has the worst record on pensions in payment and even after that cheapening it still has a "large" deficit.

Poor communications with the members will also have heightened concerns. For example, the 2003 Members' Report notes the company's power to windup the scheme, although this power has always existed and was not mentioned in previous Members' Reports.  This has been seen by some as a "softening up", preparing a climate for future bad news.

On a practical note, if members are asking questions on this topic they should note that there is little point in using the contacts on the official pensions website. Those contacts reach Pensions Administration and that department operates under instructions from the trustee-directors.  (Many trusts outsource their pension administration).  If you want to query the decision makers you need to address IBM (via your manager or Human Resources or IBM UK or IBM Corporation) or the trustees (by addressing your missive explicitly to trustee-directors or their chairman).   If your query is about IBM's intentions rather than the trust's knowledge, agreement or preparedness for them then it is obviously best addressed to IBM.

Below is the response by IBM and by pensions administration to enquiries prompted by the media. (AMIPP does not know of any response from the Trustee).   The response is interleaved with AMIPP's comments in green.  The response, which has been issued many times to both employees and retirees, reads:
Pensions Policy is a matter for the IBM Company HR department, rather than Pensions Trust.
"Pensions Trust" is a reference to IBM UK Pensions Trust Ltd, the enterprise run by the trustee-directors; there is no other trust.

On any assessment of the potential, the statement is simply untrue.   The speculation is about windup and the Trust has the power to windup the scheme, just as the company has.  (Although neither will do so.)  Only the Trust has power to amend the Deeds  (although it needs approval for its proposals from the company).  For all proposed amendments, the Trust has to decide whether they meet the requirements of the regulations with respect to protecting members' rights.  What this sentence actually says is that the Trust has a history of following company goals rather than scheme member protection and as a result pensions policy has been solely a matter for IBM.

Rather than forward on your note to HR for a response, we have received the following comment from Dave Heath, HR Director, which I am pleased to be able to send to you.

Statement from David Heath.
Last week, there was some media speculation that IBM is considering winding  up its C Plan pension scheme. As you know, IBM does not comment in the media on rumour and speculation.

It may be helpful however to draw your attention to a statement contained in the most recent IBM Pension Members Report, where the Trustee Chairman Jim Lamb commented:
AMIPP has not seen the the terminology "IBM Pension Members Report" used before but the quote is from the 2003 Members' Report.  Probably "IBM Pension Plan 2003 Members' Report" was intended since that is the title on the document.
"...the Company has confirmed to the Trustee that it remains the Company's current intention to continue to support the Plan through the payment of employer contributions in accordance with the provisions of the governing Trust Deed and Rules. The Trustee has welcomed this positive confirmation from the Company."
This statement is not helpful because it is not relevant.  A current intention is not relevant because it may not be the intention tomorrow and the speculation is about the future.  An intention to pay according to the provisions (which might be changed) is not relevant because the speculation is not about whether IBM will behave legally, it is about whether the scheme's provisions will be changed.  AMIPP has commented before that if the Trustee welcomed such an inadequate statement of support for our schemes it was wrong to do so.

David Heath
UK Director of Human Resources

It is to be expected that David Heath would be used as the spokesman but with the deficit running around 1 billion most IBMers will know that any decisions of this magnitude are made by the Corporation rather than by the UK directors.
Other companies do issue denials of scenarios that are known to be impractical.  Other companies do offer reassurance about the forseeable future.  Other companies commit to funding objectives above the legal minimum.  The surge of interest by the scheme membership offered an opportunity to communicate with the members in a respectful way rather than fostering fear, uncertainty and doubt.  It is an opportunity missed. 


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