The IT major is seeking to close several defined benifit pension plans and even commenced a 60 day consultation period
Unite, the UK’s largest union, is warning IBM to brace itself for a backlash from thousands of employees against the company’s plans to close the final salary pension schemes to future accrual and to alter the terms of its early retirement scheme.
IBM has around 18,000 employees throughout the UK. The company has several defined benefit pension plans which it is seeking to close and has commenced a 60 day consultation period with a Pension Consultative Committee of employee representatives, including Unite members. Unite calculates that typically people in their mid 50’s could lose up to GBP200,000 as a result of these changes from the retirement pension they had expected to draw before the company’s announcement in July.
According to the union, the proposed changes will have a devastating effect on future pensions in retirement and lead to between 700 and 1000 people opting for early retirement prior to April 2010, when the new early retirement provisions apply. This announcement follows similar announcements by other IT companies including that of Fujitsu in May, which is also being challenged by Unite.
Peter Skyte, national officer for IT and communications at Unite, said: IBM is facing a backlash against its pensions proposals. Hundreds of workers are joining the union determined to stand up to this unacceptable attack on their pensions. These highly skilled and experienced staff were key to the company’s survival and they view the company’s proposals as a kick in the teeth. IBM is a highly profitable company with substantial revenues and cash reserves. But is using the recession as a cloak to close its pension schemes to existing members and further line the pockets of its shareholders and senior executives at the expense of its loyal workforce.