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.
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.
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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