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IBM Pension Scheme

As far as I am aware, it has not given any good reasons, but cited the long-term prosperity of the company. It claims that Britain is poorly performing, compared to other countries, but the company hit all its targets here for making profits, so that is something of a surprise. Interestingly, the company retains the flexibility to offer a more attractive discount rate. IBM would say that that is so that is can make early retirement decisions on compassionate grounds, but many of the workers have expressed the view that that flexibility could also be used, perhaps in a few years' time, to get rid of another tranche of the company's most loyal and experienced workers. Many of them have expressed regret that the company does not appear to value their lifetime commitment and feel that they should be entitled to a proper redundancy package if the company wants to get rid of them. The scheme is really rather clever, and there are concerns that other companies might look at how IBM has managed to handle a large number of job losses and that the manipulation of the early retirement discount factors might become a commonplace mechanism for avoiding redundancy payouts. If the Government are serious about workers' rights, I urge the Minister to investigate that aspect of the problem and take steps to ensure that manipulation of pension scheme terms is not used by companies as a way of avoiding redundancy payouts. The company would claim that it has made some concessions as a result of the consultation, but in reality those are minor when compared to the scale of the changes overall and have no significant impact for employees aged 50 or over. Unfortunately, it is fairly common to see final salary schemes end. In many cases they are unsustainable in the long term, but a principle of fairness would suggest that employees should be given an opportunity to minimise the impact of any changes. The closer one is to retirement, the more important that is. The manipulation of the early retirement discount factors in no way passes that fairness test. As I have already pointed out, those who are planning to retire in as little as two years' time have been forced into going now to reduce their financial losses. They have simply had no opportunity to try to make good the difference or to phase in to their retirement in a more acceptable way financially. I have also become aware of another practice that one would not usually expect of a world-class employer: people have been offered pay rises, but only on the condition that they agreed that the pay rise would not be pensionable for the purposes of the defined benefits scheme. If employees disagreed with that condition, they did not receive the pay rise. There are also concerns about manipulation of the performance management system, but I must stick to pensions for the purposes of the debate. It is not just workers and local MPs who are concerned by the way IBM has manipulated its pensions system. The pension trustee has referred the matter to the courts and IBM has refused to delay implementation of its plans until the outcome of any court case is known. In the light of the pending court case, the Minister may like to respond in principle to the following questions. It is clear from this case that there is a lack of clarity about the financial implications of the scheme and the factors that have prompted the company to renege on its 2006 promise. Is there not a case for more detailed financial modelling being made available to workers so that changes to such schemes are fully justified and fully understood? Should there not be a principle of no sudden changes, so that when changes to pension plans are necessary, those who are affected have time to take measures to minimise personal financial loss? Will the Minister look at the manipulation of the early retirement discount factors and reassure herself that they are not being used as a means of avoiding redundancy payments? Will she also examine whether there is an age discrimination aspect to the manipulation of them? It is strange that the company seems to want to get rid of so many of its most skilled workers. Will she consider legislating so that workers are protected from the impact of such sudden changes? I have received e-mails from IBM employees from all round the country as a result of calling for this debate. Almost without exception, they feel let down by the company to which they have devoted the best years of their life, and they feel that the Government offer them no protection against what they see as bully-boy tactics.