IBM accused of pension ‘bullying’ (From This is Hampshire)

IBM accused of pension ‘bullying’

9:41am Thursday 9th July 2009

• Print
• Email
• Share
• Comments(2)

HAMPSHIRE staff of computer giant IBM, one of the county’s largest employers, have accused the company of “bullyboy”

tactics after it revealed plans to shut its final salary pension scheme.

Bosses at IBM, which employs about 6,000 people in Hampshire, at its UK research base at Hursley and its UK headquarters in Portsmouth, are launching a consultation on the plan.

In total 5,000 of the company’s 20,000 UK workforce will be affected, including hundreds from Hampshire.

One senior member of staff, who did not want to be named, said workers no longer trusted the company.

“It hasn’t gone down at all well.

They are chipping away at employee benefits and people don’t trust what they say any more.

“In the good times the executives were happy to take money out of the scheme but as soon as there are tough economic times it’s the employees who pick up the tab.”

He said a move to ramp up the cost of retiring early after April next year was management using “a big stick”.

“It’s saying to people if you don’t go before April you’ll get hammered.

So people have a choice – go before April or wait until you’re 60. It’s forcing people into a corner and it’s fair to say there’s a general feeling it’s bully boy tactics.”

IBM, which closed the scheme to new members in 1997, joins a growing number of firms shutting their final salary pensions, which provide retirement income based on length of service and salary.

Last month BP – which has a 69,000-strong pension fund, one of the largest in the UK – announced it was closing its final salary scheme to new members, while Barclays Bank said it was shutting its final salary pension altogether and transferring its 18,000 staff members to a hybrid one instead.

It is thought IBM is making the decision due to rapidly-rising costs of the so-called defined benefit pension fund putting pressure on the company’s future performance.

IBM said: “Taking action to maintain competitiveness in the marketplace and introduce greater predictability to long-term pension provision costs, IBM UK has communicated to UK employees initiation of a consultation process regarding a package of pensions-related proposals.

“These proposals include enhancements to the defined contribution plan for all IBM UK employees, and closure of the defined benefit plans for existing defined benefit members. IBM staff will be consulted in a 60-day formal process that starts on August 5.

• Print
• Email
• Share
• Comments(2)