It is noticeable that the members' report does not mention the complaints that are with the Ombudsman. The "Times" newspaper thought that it was worth telling all its readership about the Ombudsman investigating the IBM Trust, and IBM sent a relevant email to the employees, but Barrie Morgans apparently does not think this is a "general development" that will be of interest to IBM retirees.

However, the members' report is changed from previous years, because of the complaints. There is new material about the 1997 actuarial report. It is a bit late for this to appear; it could have been introduced three years ago. It should already have been obsoleted by the actuarial report for 2000 but that report, although it should relate entirely to data known in year 2000, was still being adjusted in May and will not be available until August. The Trust gets an actuarial report every year. It is required to show us one every three years.

The reason for the members' report adding the actuary's name to the back page and introducing the topic of actuarial reports is to provide a place for the Trust to say:

"Investment performance of the Defined Benefit sections does not alter the Pension entitlement of its members as these are related to an individual's final salary."

This is the inexactitude that characterises the Trust's attitude to retirees nowadays - that economics and affordability have nothing to do with how far our pensions are eroded from their initial value.

This is not how other pension schemes operate and is not what IBM used to say in the days when it wanted our skills and effort. A couple of quotes from Management Information Letter 785 dated 18 November 1986, subject IBM Pension Plans:

"As with all compensation and benefit matters, we aim to compete favourably with the practice of other leading companies."

"However, in common with private industry in general, the company cannot guarantee these [pensions in payment] increases, because it is impossible to predict the economic environment that will affect their provision."


In 1991 the Trust explained the relation between surplus and pension erosion. In "IBM Pension Matters number 2", which carries a foreword by the IBM UK Pensions Trust Director, the question is asked:
"Why can't pension payments be index linked?"
The answer given begins
"The answer is simple. Affordability."

The answer to
"Why can some pension funds pay for inflation increases?"
begins
"Some pension funds have surplus assets enabling them to make pension increases in line with inflation."

The answer to
"Why can't the IBM pension fund do the same?"
begins
"The IBM pension fund does not share the above characteristics. It is a relatively immature fund and the company does not have high attrition or redundancies. The fund is not, therefore in surplus. Consequently, there are no assets available within the pension fund itself to guarantee pension increases."


"Entitlement" is a word that should be treated with caution. Sometimes it just means that we are entitled to have the deeds and regulations honoured. One judge put it
"The purpose of the scheme is to provide the retirement and other benefits to which the members, pensioners and dependants are entitled under the rules."

However, once you have retired, what payment you receive is decided not by rules but by the choices made by IBM and the trustees (hopefully operating within the rules). The purpose of operating the scheme in this way is to honour the bargain that was made when you exchanged your skills and effort for a prospective pension. Sometimes "entitlement" is used in this wider sense of payments.

It is an example of corporate power that the Members' Report, with its new IBM slant, can be mailed to all members, while pointing out that the IBM slant is unusual and inconsistent depends on electronic access by a minority.

The section in the Members' Report about what to do if dissatisfied continues to avoid mentioning the Internal Dispute Resolution Process, despite the fact that it is a legal requirement for the Trust to have one. The bit about responding "as quickly as possible" is a bit of a joke also - as far as we know the replies required by the IDRP have always been sent with as much delay as the regulations allow.

In with the Members' Report was the June 2001 issue of "It's your pension". It is good news that the Trust is distributing more information, so that, for example, all members can know what LPI means rather than just those following the website. The reason for picking GMP as a topic may be to imply "Don't worry too much about how your pension is being eroded because some of it has its value protected". Possibly those retirees who don't see a GMP part on their pay notification might swallow this, but those who see it separated will know what a small proportion of their pension is protected. (Unlike the majority of non-IBM schemes, which do have guarantees for all the pension)

Back to: Documents Contents