IBM is proposing to close its final salary pension scheme to
current UK and Ireland staff.
The move would affect around a quarter of the company's 20,000
UK workers.
Most of
IBM's employees are already on a defined contribution pension
plan. Under the proposals the rest of the company's staff would
also move to defined contribution.
IBM closed the defined benefit, or final salary, pension plan to
new members a few years ago.
The company says the move is to help the company "maintain
competitiveness" in the tough economic climate.
Staff on final salary pensions are guaranteed a pension at the
end of their career based earnings and length of service. Employees
on a contribution scheme put money into an investment fund, which
is used to buy a annual pension.
An IBM spokesperson said, "Taking action to maintain
competitiveness in the marketplace and introduce greater
predictability to long-term pension provision costs, IBM UK
communicated to its 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
members."
The
Unite trade union says the company is using the recession as a
"cover" to cut pensions. It said, "Unite believes that IBM can well
afford to keep the existing scheme open but is seeking to cut costs
in order to make more money available for dividends, to buy back
IBM shares and for acquisitions."
Peter Skyte, Unite National Officer, said: "IBM is a highly
profitable company with substantial revenues and cash reserves.
"This is a kick in the teeth to people in IBM who helped to
rebuild the company when it was in difficulty. This announcement
demonstrates that company loyalty is too often regarded as a one
way street in the corporate world of 2009."
IBM is not the first IT company to cut back on its pensions -
Fujitsu also recently announced its proposal to close its final
salary scheme.
ends