IBM UK workers up in arms at pension cuts

IBM's proposals to close final-salary pension schemes by 2010 in an effort to trim costs have led to widespread employee protests.

Trade union Unite has claimed that hundreds of angry workers have joined the union over the past two months in resistance to the plans, announced at the beginning of July.

"IBM is facing a backlash against its pension proposals," said Peter Skyte, national officer for IT and communications at Unite. "Hundreds of workers are joining the union determined to stand up to this unacceptable attack on their pensions."

Around a quarter of the 20,000 IBM employees in the UK are currently on the final-salary pension schemes.

The Association of Members of IBM UK Pension Plans has received thousands of forum posts on the pension cuts from staff upset about the action and questioning its legality. The organisation has urged members to write to their MPs and complain.

IBM changed the details of the final-salary pension scheme in 2006, and closed off the benefits to new members.

"Many people felt then that the scheme would remain unchanged for a good few years," said Skyte. "Now, at the meetings we have held, there is a feeling of ongoing betrayal. The impact is devastating on many people."

Unite said that it has held meetings in Southhampton, Warwick and London, at which hundreds of IBM employees have attended. The union will hold a meeting tonight in Greenock and another on Thursday in Manchester.

Unite claims that IBM employees in their mid-50s could lose up to £200,000 as a result of the changes to the retirement pension cuts.

The situation has been exacerbated by IBM's posting relatively good financial results, which managed to beat analyst expectations. Profits for the quarter ending 30 June rose 12 per cent to $3.1bn (£1.9bn), or $2.32 (£1.42) per share.

"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," said Skyte.

IBM, meanwhile, has said that workers who are part of the defined benefit scheme will be given the opportunity to join the company's defined contribution scheme, whereby both the employee and the company pay a percentage of salary into a fund.

Employees currently pay three per cent while IBM pays five per cent, but the company said that it is enhancing the scheme for all members.

"IBM will match any monthly contribution increases made by employees in the defined contribution plan, above and beyond the standard provision, by a further one per cent or two per cent," said a company spokesman on Monday.

The pension changes are in the middle of a consultation process that started on 5 August and will run for two months.

"IBM is in a process of consultation as required by law, during which time employees will have the opportunity to ask questions and send feedback on the proposals," said the spokesman. "It would be inappropriate to discuss further during this consultation period."