back to article IBM UK facing 'backlash' over pension snuffing

Unite - Britain's largest union - has warned IBM UK of a coming "backlash" from thousands of employees over its decision pull a prime pension plan out from under 28 per cent of its workforce. In early July, the company shelved its Defined Benefit or "final salary" pension scheme, which would have guaranteed retired employees a …


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  1. Anonymous Coward

    No Suprises.

    IBM have already announced there would be no salary increases this year, clamped down on any sort of spending so there's no new software and no new hardware... And then turned around and bought two new companies.

    Business as usual. Screw your staff and to hell with it. Oh, and I've been an IBM employee for over three years now.

  2. Ian Michael Gumby

    IBM doesn't care...

    Look, quite frankly IBM has the following message to their employees. 'Be thankful that you still have a job and if we wanted your opinion, we would have told you what to say.'

    That's the unfortunate truth of IBM where they will do what they can to maximize their short term profits. Why? Its because its how their senior execs are compensated. As long as they make their quarterly profits, no one cares.

    But you can only cut so far until it causes permanent damage to the brand. IBM is almost to that point.

    As far as a corporate culture of being responsible to not only their customers, but also their employees, IBM gets a resounding F.

    Fail for IBM's corporate culture of short term greed and you can bet that within a year of Sam's retirement, IBM's share price will plummet.

  3. Anonymous Coward
    Anonymous Coward

    Translation - The union can FRO

    > "IBM is in a process of consultation as required by law during which time employees will have the opportunity to ask questions and send feedback on the proposals,"

    That's reassuring isn't it. The employees can ask questions and provide feedback because that is what's required of IBM by law. They are not doing this out of any moral duty but because that is the bare minimum needed from them to comply with the law of the land.

    After this consultation period they will then do what they like.

    On the positive side if the laws had been in place to protect the workers, as in many other European countries, then maybe the jobs wouldn't have come to the UK in the first place. They would have gone to another third world country with repressive labour laws, China springs to mind.

    The Labour party has done as much for labourers as Maggie Thatcher did for women's rights, sod all. At least you expect the workers to get shafted by the Tories.

  4. Anonymous Coward

    Stealing from workers to pay the Execs even bigger bonuses

    IBM will consult as per the regulations and then implement what they intended to do all along. This is "Redundancy By Stealth" and will force people to retire before April, because if they do not, they will have to work 4 extra years to not suffer the same penalty. Early redundancy (sorry, retirement) will NOT attract redundancy pay. IBM UK is a very profitable company with 2008 profits exceeding 2007 and with 2009 heading for a record year.

    These changes are being made to generate even more profit so that the exec share options become more valuable for US VPs and for the UK CFO and CEO who are not UK employtees.

    Screw the workers! This is raiding the pensions of the poor to pay bigger bonuses to the Execs. Palmisano only earned $28 million last year; clearly that is not enough.

  5. TomBrown12310


    Check this site to see the illustrious leader of IBM trousered $28 million in 2008, including a top up of his pension fund by $4 million. No wonder they have to punish the poor grunts on the ground.

    He even manages to rake in another $500K a year from being a director at Exxon

    The word "greed" springs to mind. It's not just him though - the entire IBM executive management have their noses in the trough - makes the UK politicians look like choir boys !!!!

    IBM even have a department of approximately 50 pilots for the planes and helicopters to ferry him around

  6. Anonymous Coward
    Anonymous Coward

    If you dont like it, leave...

    ... I did, 11 years years ago. It was a shit company that did not care about staff back then, and unsurprisingly, is the same today...

  7. raving angry loony


    Interesting. When someone signs up to a company with a defined benefit plan, surely they need to renegotiate the employment contract to change that? Or are companies now allowed to unilaterally change anything they want in a contract without so much as a by-your-leave?

    We obviously still need unions today, because corporations are STILL of the opinion that employees are just so many slaves they can abuse at will.

  8. Anonymous Coward

    Goodrich, Unite

    "When someone signs up to a company with a defined benefit plan, surely they need to renegotiate the employment contract to change that?"

    You'd have thought that, wouldn't you, based on fundamental principles of justice which are obviously optional for corporate lawyers and indeed for career Blue Labour politicians.

    Anyway, the UK subsidiary of US outfit Goodrich tried something similar in 2008; the proposal was as usual to close the DB scheme.

    To cut a long story short, the brothers and sisters didn't like the management's proposal, Unite members followed due procedure, a very brief strike (and an overtime ban) followed, and everyone who was in the DB scheme (sadly, non-union scumbags included) still has the benefit of the DB scheme. says:

    21 February 2008

    Workers at aerospace company Goodrich have clinched a deal on pensions today following a one day strike held on Monday 28th January and a continuous ban on overtime.

    Whilst the union is disappointed that the final salary scheme will remain closed to new entrants, a ground breaking deal has been reached that will secure the scheme for existing members going forward. The company has guaranteed that it will not make any changes to the scheme for the next 5 years.

    Unite national officers, John Rowse and Bernie Hamilton say, "Unite is disappointed that new staff will no longer be eligible to join the final salary pension scheme. However, the scheme remains open for existing staff and the union has clinched a ground breaking deal with Goodrich which guarantees no changes to the scheme for at least the next five years. This is an industry first and to date is virtually unheard of."

    Increases in contribution rates have been agreed but will be phased in over two years. The cost of the increase will be partly offset by two instalments of £250 over the two year period.

    Goodrich employs 1600 staff based across the country.

  9. SynnerCal

    Big biz the best union recruiters

    If you don't like the arrangement they're proposing then you've got the choices surely of either telling Big Blue to stick it and leave, or unionise. I was soured by my previous experience in a civil service union, but I joined Unite to get some backup against another crap employer - in my case HP.

    Seriously IBMers - invest a tenner a month and join Unite - then at least they can go to bat against IBM for you in a position of strength. I'm thinking of course that IBM will use the usual defence that the union members are 'merely a vocal minority' - prove them wrong!

    Like "raving angry loony" I'm having problems understanding a mechanism involved. Surely a 'final salary' pension is/was part of your contract terms, and one side of a contract is not allowed to unilaterally change that contract - in which case this idea can be scuppered by everyone not agreeing to the change?

    Before folks start accusing me of naivety can I just point out that the "but it's part of my contract so I have to get it" was used by the bankers recently to justify their obscene bonuses and it's certainly been used by HP sales and exec's to "justify" their bonuses too. In which case, if _their_ contracts are inviolable, then surely those of the 'lesser orders' (ie the folks that actually _do_ the work) are similarly blessed?

    We in the IT industry _need_ to stop the rot of big businesses screwing over the "little guys" terms and conditions to bulk out their bottom lines. And this issue looks like a good place to draw that "line in the sand"! After all, if IBM close their pension, then it's a safe bet that my HP one will be next to go. And this won't be the end of it...

    Remember - join Unite and we can all fight these US execs together!

  10. crypt

    quite clearly

    To sack the bosses.

    Clearly using the "recession" as a stick to beat the working man.

    Fight back or suffer.

  11. Anonymous Coward
    Thumb Down

    impact on customers?

    I wonder if IBM UK has considered the impact on customers? If they lose 2,000 of their most seasoned and experienced professionals, who will perform the skilled technical customer facing roles? I guess they will use cheaper graduates who will take much longer and this could result in even more revenue, but I bet the customers will not be as happy with this approach when they end up paying more for less.

  12. A 16

    Language barrier?

    or does this actually make no sense?

    he said. "It would be inappropriate to discuss further during this consultation period."

    Consultation.. discuss... I could swear they were the same things.

  13. PRL

    Employee contributions?

    If the employees have been paying contributions and IBM unilaterally revoke the final salary pension - I think IBM should be obliged to offer (as a minimum) a full refund of all contributions to date (less tax, but with compound interest added).

    An employee's contributions are part of pay so if the scheme was wound up I'd want them back, or the benefits accrued to date (whichever is greater).

    If as is usual, the IBM-provided schemes (past and future) are optional, the employees should be free to move their contributions [past and future] to a pension / savings / investment of their choice.

  14. IveBeenMaxwelled

    Skippy, the Butcher Kangaroo

    Make no mistake, Skippy (the Australian head of IBM UK, parachuted in to do Armonk's dirty work) has seriously underestimated the effect on IBM's staff. He will get his way, remove hundreds of people with no redundancy pay, make the corporation's share price tidier and trouser a nice payoff before heading back down under.

    He will leave behind a demoralised, de-skilled and bitter workforce, massively unionised and ready to look outside a company that treats its loyal employees like kangaroo dung.

    Escape - because that's what hundreds more employees will be trying to do.

  15. Anonymous Coward
    Anonymous Coward

    loyal workforce

    is there still such a thing? I can't think of many/any large companies that deserve one. There may be some SMBs that do but I don't know which.

  16. asdf


    Got to love the fact in many countries, corporations have more rights than actual living people and less responsiblities as well. The rich have everything they could ever want but of course always need more and get it by making the single working mother cut back on unnecessary things like medical care, etc. Bah always the way it has been, move along, nothing to see here.

  17. Anonymous Coward
    Paris Hilton

    IBM shafting their employees since the year dot!

    IBM is the eponymous souless sociopathic corporation. I've known a fair few people that've worked for Big Blue over the years and I've not heard one person speak well of them. Hell most of the conversations have gone along the lines of "So who do you work for?" - "IBM" - "Oh, sorry dude!"

    As for unionisation, I'd love to see that work in a situation like this. People who think that Unions care or are even powerful enough to make a difference in this day and industry need a reality check. Beleive me, I know, been there, done that and bought the redundancy package.

    Paris, because she seems to like a good shafting!

  18. Man Mountain

    Respect for the individual? My a#se!

    I worked for IBM for over a decade and over that time felt more and more screwed over. I remember back in the day IBM had an entire team running their internal opinion survey and the results really matters. Managers were hauled over coals if their team rated them badly and IBM itself paid attention to what the whole workforce said. One of the most important questions on the survey was about IBM's 'respect for the individual' ... a very important concept to IBM ... at least then. As you can expect the survey stopped some years back!! Over my years at IBM, payrises were increasingly few and far between for all but a handful of people and were distributed on a 'it's your turn this year, I hope you're very very grateful for just how generous we are being by almost increasing your pay by the rate of inflation 1 year in 4! My salary was so far behind market rate pay it was embarrassing so in the end I bit the bullet and left for IBM's major competitor. The grass is always greener but thankfully in this case it has been - not perfect no, but at least I feel like I want to work for this company. I know a vast number of very talented and experienced people at IBM who were only staying because they were on the final salary pension so it will be interesting to see if there is a mass exodus. I suspect if these people realised how far behind the curve their salaries are, they would be off in a heartbeat now!

  19. The Jase


    I used to work for IBM as a Manpower "temp". No pay increases, constantly promised we would be taken on full time but "there is a hiring freeze". At the same site for 4 years, so much for being a temp.

    I sacked them and walked away to a 10 grand pay increase.

    I would advise others to do the same, they will replace you, but it will cost them in training time, customer disatisfaction, recruitment and interview time, and advertising costs.

    A flame, because if I walked past IBM's board and saw them on fire, I would throw petrol on them.

  20. Anonymous Coward

    To 'Impact on Customers'...

    ...Loose 2000 in the UK, pick up 10,000 for less in India. Simple.

  21. Ascylto

    Past and present glories

    Aah, IBM.

    Is this the same IBM which has a big stake in introducing ID Cards in the UK, AND a past which included working with the National Socialists in Germany (aka the NAZIS)?

    They seem to go together, dontcha think?

  22. Anonymous Coward
    Dead Vulture

    same old corporate bull

    I could never understand why, when at college, all the "careers" advice guided people to go and work for these "blue chip" companies, you were treated like a complete failure if you didn't get a job with these corporations. Same for IT, Accountancy, Engineering ....

    I've known loads of people give their pound of flesh for these places, just to be turfed out the door on some whim of some decision made thousands of miles away by some leech.

  23. David Casler

    This happened several years ago in the States

    What's happening (deleting the defined benefit plan in favor of a souped up savings plan) and the reaction to it (shock, horror, surprise, lawsuits), all happened here in the US several years ago with rather predictable results. The defined benefits plan is now gone except for some old timers who got grandfathered in, which didn't include me. They substituted a fund into which IBM put money, but even that has been discontinued (although the money itself didn't disappear). So now it's down to the company putting a bit into a 401k plan (an American tax-deferred investment plan) and a bit more than that if the employee also saves. Mine got hammered in the recent crash, but shows some signs of life. Unfortunately this is the new way of doing business. Both we Americans and you Brits need to remember that we're competing with you folks in India and China and the great leveling is taking place. I'm just glad to have a job--and a good one at that--even though any thoughts of retirement have now been put on indefinite hold.

  24. Anonymous Coward
    Anonymous Coward

    @AC: 17 Aug 01:51 "unions can't make a difference"

    "People who think that Unions care or are even powerful enough to make a difference in this day and industry need a reality check."

    No mate, you're the one who needs a reality check. Open your eyes and read before your ridiculous ranting. Check what Unite (they're a Union, OK) did for the workforce at Goodrich UK last year. It's posted here - AC 15Aug 07:55.

    I think Goodrich UK are about the same size as IBM UK. They're both US owned. They're both in high tech markets (IT, aerospace). They've probably got other stuff in common too.

  25. Anonymous Coward

    Pension Funds - Bollocks

    I've just received a statement from a (small) pension (defined payment) fund I had when I worked for a company that has now closed. Much to my surprise they've only managed to loose 1/3 of the money I've given then, they were even kind enough to show that at an annual growth of 4% (Bollocks) I might even get back the money I paid in by the time I retire.

    However when I looked at the annual salary that I would receive from such a pension, I also saw that I had put the same amount of money on deposit and made withdrawals at the same rate as the pension, then the money on deposit would last 24 years!!!!!!!

    Pension funds are a rip off, they do not exist for the benefit of the members, they exist for the benefit of pension/insurance company execs.

    Icon: 'cos I can't use the fail and thumbs down as well.

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