Katy Clark MP for North Ayrshire and Arran met with IBM employees in Largs on Friday to discuss the company’s proposals to reduce the terms of their pension scheme. Many of the workers have been employed by IBM for more than 20 years as the proposals affect those on the “C” plan and “N” plan pensions which were offered to those who started working for IBM in the 1990s and before. More recent entrants already have worse pension terms and conditions.
Katy said “What is concerning from what I have been told is that the finances of the pension scheme are relatively sound and there is no need to make such proposals. There has been a very short term problem very recently due to the massive drops in the stock market but this is very much a recent issue and of course the nature of things is that stock values go up and down. It seems that this is simply being used as an excuse to bring forward proposals which the company were considering anyway. I am writing to the Chief Executive of IBM and the Business Secretary Peter Mandelson asking them to intervene.”
“There is a 60 day consultation period in operation which the workforce must use to out their case strongly.”
The Largs residents who attended the packed meeting said they believed that some of the workforce could be up to 30% to 40% worse off if the changes go ahead.
Brian McDonald, Regional Officer for Unite the Union, added; “Its Unite’s view that IBM is a highly profitable company with substantial revenues and cash reserves and can well afford to keep the existing pension scheme open but it appears that it wants to boost profits for shareholders.”
“The proposals are a kick in the teeth to the workers of IBM. They helped to rebuild the company when it was in difficultly. Loyalty is too often regarded a one way street in the corporate world of 2009.”
The local MP continued “IBM have always been seen as one of the best employers and if they are trying to erode their schemes so substantially it is bad news for us all. I have always believed that pensions are “deferred pay” and should be set up in such a way that it is not possible for the employers to come along and change the rules at a late stage of the employee’s employment. Much of pension law in this country is however based on trust and is “discretionary” so the pension trustees can change the rules.”
Katy said “I met with some very angry employees. I am writing to Brendon Reilly, Chief Executive UK & Ireland to raise these concerns and will be working with the workforce over the coming weeks to look out how these proposals can be stopped”.