IBM in meeting over UK final salary pension scheme

IBM is rumoured to be planning to close its final salary pension scheme to thousands of its UK workers.

The IT giant has called a managers’ meeting at a London hotel tomorrow, at which it is due to discuss changes to its pension arrangements.

It declined to say what these changes would be ahead of the meeting, but the group is expected to announce plans to close its final salary scheme to existing members, according to the Evening Standard newspaper.

About a third of IBM’s 20,000-strong UK workforce are members of the scheme, which was closed to new members some time ago.

IBM, which faces a deficit of $7.4bn (£4.14bn) on all its schemes, recently told US workers that it planned to close its final salary scheme to existing members there from 2008.

An IBM spokesman said: “Retirement costs are an issue worldwide and IBM continues to review retirement benefits on a country-by-country basis.

“As appropriate, IBM will consult locally with employees and employee representatives on any retirement proposal. As no final decisions have been made other than the recent US announcement, we have nothing further to announce.”

If IBM does decide to close its final salary scheme it will be the latest in a line of companies taking action to reduce their pension costs, including Rentokil Initial, the Co-operative Group, Arcadia, Scottish Power, John Lewis, Scottish & Newcastle and National Australia Group, which owns Clydesdale Bank and Yorkshire Bank.

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