Wednesday, 8 July 2009

IBM UK likely to close final salary pension scheme

(By Richard Holway 7.00am 8th July 09) The BBC has carried the news (See IBM consults over pension closure) that IBM UK (which has 20,000 employees) is to close its defined benefit pension scheme to current members next year (It’s been close to new members for some time). The BBC reports that “In an email to staff, IBM's UK and Ireland general manager Brendon Riley said the plans were caused by rapidly-rising costs and liabilities. The email read: "For IBM UK also, the rapidly-rising costs and liabilities associated with the provision of defined benefit pensions is placing pressure on our long-term ability to invest for future growth and operate in an intensely competitive global market.""

It is an unfortunate fact of life today that all such schemes are doomed. This situation is being tackled in the private sector but NOT in the public sector. I believe that this will be a key action post the lection and could cause industrial strife on a level to that which hit Thatcher in the 1980s. But, just as the battles had to be fought then, we just have to solve this problem before we hand our kids a legacy of disastrous proportions.

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