Pension schemes at risk for IBM production staff

Three
thousand employees at IBM’s main production plant in Greenock,
Scotland,
reportedly face a threat to their final salary pension scheme.

According
to an industry source quoted in the Scotsman
newspaper, the IT giant is considering options that include winding up IBM’s
contributory C-Plan scheme, which pays out a defined benefit on a final salary
basis.

It
forms part of the firm’s £3.5bn UK
pension scheme arrangement, which was closed to new entrants in 1997.

Scheme
trustee Brian Marks, in a personal capacity, told the IBM staff pensions
website that the company is considering options that include a part wind-up of
the scheme.

According
to the scheme’s annual report, as listed in ‘Investment & Pensions Europe’,
the IBM UK pension plan has grown to £3.544bn, from £488m last year.

However,
the scheme has suffered reduced asset values and increased liabilities during
the past year, and the fund now suffers from a large deficit.

Scheme
actuary Watson Wyatt is currently preparing the scheme’s valuation, which will
be available in the fourth quarter of 2004.

IBM,
which refused to comment on the speculation, has already suffered problems with
its pension scheme in the US,
where a court told the company to reimburse 140,000 employees and ex-employees
whose benefits had been underpaid.

By Daniel Thomas

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