IBM faces union attack on pensions plans

IBM employees are flocking to the unions, says Unite

IBM is facing a backlash from employees over plans to close final salary pension schemes to future accrual and to alter the terms of its early retirement scheme, according to union Unite.

The union said the proposed changes will have a devastating effect on future pensions in retirement and potentially lead to between 700 and 1000 people opting for early retirement before April 2010 when the new early retirement provisions come in.

Peter Skyte, Unite national officer for IT and communications, said IBM employees have been joining the union in large numbers over recent weeks.

“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," he said.

“IBM 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.”

Unite points out that IBM is a profitable firm with deep cash reserves. In the second quarter of 2009 the firm reported profit of $3.1bn, up 12 per cent year on year, despite the recession.

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.

Unite calculates that typically people in their mid 50s could lose up to £200,000 as a result of these changes from the retirement pension they had expected to draw before the company’s announcement in July.

Unite is also in the midst of an industrial action consultative ballot at Fujitsu over changes to pension and salary schemes.

A spokesman for IBM said: "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. It would be inappropriate to discuss further during this consultation period."