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IBM Pension Scheme

I congratulate the hon. Member for Romsey (Sandra Gidley) on securing this debate. It is clear from the attendance in this Chamber what anxiety and outrage the decisions have caused for right hon. and hon. Members throughout the country, as IBM is a large employer. Many colleagues from both sides of the House are here today precisely to express their worries about what IBM has chosen to do and to pass on the feelings of the constituents whom they represent. Even in this short debate, the outrage and sense of injustice have certainly been communicated. As the Pensions Minister, I have received several letters about the proposed changes to IBM's pension scheme, so I know that the issue has caused upset, outrage and worry up and down the country. It is always disappointing when an organisation such as IBM decides to close its final salary pension scheme to future accruals. Of course, this remains a matter for IBM to work through with the trustees and employee members of the scheme. It would be inappropriate for me to comment in detail on the case, especially as, as the hon. Member for Romsey pointed out, the trustees are currently going before the court to seek clarification, if I may put it that way, on some aspects, particularly those of early redundancy rights and how they impact on the scheme. I am not directly privy to the company's specific proposals, and I would not expect to be, but I note that IBM US appears to be pursuing a similar policy. Only IBM can comment on its motivation for making the changes, and I am certainly not about to try to answer for it. However, I sympathise with the IBM pension scheme members. I understand the anxieties that arise for members when such events occur. As has been hinted at by all hon. Members who have made contributions, however short, to this debate, and particularly by the hon. Member for Romsey, some employees' future financial situations have suddenly changed quite dramatically, and it is clear that they now face difficult choices that they had not anticipated having to face. The changes that IBM has made to its pension scheme are disappointing but they are for it to defend—I certainly shall not try to do so. I only hope that the IBM board is watching this debate and taking note of the reaction that its decisions have provoked, albeit they have not been expressed directly but indirectly through those in this place who represent the views of constituents. This Government believe that all workers should have access to workplace pension saving, which is why we continue to make good progress with our plans to introduce automatic enrolment from 2012. Hon. Members may wish to note that the Government published a suite of 10 sets of draft regulations and orders which combine to help deliver pension reform and the national employment savings trust—formerly known as personal accounts—which will be the new low-cost, simple pension scheme for employers to use. For decades, employers have been moving away from defined benefit to defined contribution schemes. Membership of defined benefit schemes peaked in the 1960s, when I was still at school, and has been in decline ever since, so this is not a new phenomenon.