IBM staff at Hursley and Portsmouth 'betrayed' over pension scheme shake-up

An IBM Cell Processor - picture by Érick Luiz Wutke Ribeiro

An IBM Cell Processor - picture by Érick Luiz Wutke Ribeiro

First published in News Daily Echo: Photograph of the Author Exclusive by , Business Editor

“SHOCK, anger and betrayal” are the feelings of IBM staff faced with drastic changes to their pension rights, according to confidential documents leaked to the Daily Echo from inside the IT giant, one of Hampshire’s biggest employers.

Marked “IBM Confidential”, the letter to chief executive Brendon Riley from the firm’s Pensions Consultation Committee (PCC) warns that staff are flocking for union representation, hundreds of unhappy, experienced workers are being targeted by headhunters and customers are concerned about the impact on their business.

It’s the latest indication of internal strife at IBM, which employs about 6,000 people in Hampshire at its UK research base at Hursley and its UK headquarters in Por t s m o u t h , over plans to close the final salary pension scheme and alter the terms of its early r e t i r e m e n t plan.

As previously reported by the Daily Echo, the Unite union claims hundreds of angry IBM workers have been joining-up in readiness to fight the proposals which they say will have “a devastating effect” on future pensions. It calculates that people in their mid-50s could typically lose up to £200,000 as a result of the changes.

Now the PCC letter has confirmed staff are in uproar over the proposals.

“In the last 20 years we, as a group, have never seen such a reaction from our colleagues.

Expressions of shock, anger and betrayal of trust are widespread,” it says.

“IBM UK is in danger of using pension changes as a short term lever to improve the company’s profits, while undermining the future financial security of many employees in the process and turning many of their life plans upside down.”

One senior member of staff said: “I went to a union meting in Eastleigh at the Holiday Inn where they had planned for 100 people but they ended up with over 300.

There was a lot of anger there and there was a wide range of people including senior managers.

“All trust has been lost with the company because they promised three years ago that the final salary scheme would be kept open until 2014. There are record revenues and earnings and the company is awash with cash. They’ve got billions but they want more billions. It is driven by greed.”

Another worker said the row had seen even senior staff turn on each other.

“There is w i d e s p r e a d anger and r e s e n t m e n t even among low level managers towards senior managers. I have never known IBM’s management break ranks before.”

Peter Skyte, Unite national officer for IT and communications, said: “IBM is a highly profitable company with substantial revenues and cash reserves, but is using the recession as a cloak to close its pension schemes to existing members and further line the pockets of its shareholders and senior executives at the expense of its loyal workforce.”

A spokesman for the IT firm said: “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.

It would be inappropriate to discuss further during this consultation period.”

Comments (13)

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11:42am Thu 20 Aug 09

Nearly an OAP says...

I worked for IBM at North Harbour, Portsmouth in the 80s and the conditions of the IBMers (as they were called) was second to none. This company who I believe are Mormons looked after their full time staff from the cradle to the grave, and should an employee die in service they would look after their family. Basically the employees have been molly coddled into expecting very high salaries, pensions and welfare care so welcome to the real world and the conditions that most of us face now.
I worked for IBM at North Harbour, Portsmouth in the 80s and the conditions of the IBMers (as they were called) was second to none. This company who I believe are Mormons looked after their full time staff from the cradle to the grave, and should an employee die in service they would look after their family. Basically the employees have been molly coddled into expecting very high salaries, pensions and welfare care so welcome to the real world and the conditions that most of us face now. Nearly an OAP
  • Score: -1

12:10pm Thu 20 Aug 09

10 Minute Man says...

Nearly an OAP wrote:
I worked for IBM at North Harbour, Portsmouth in the 80s and the conditions of the IBMers (as they were called) was second to none. This company who I believe are Mormons looked after their full time staff from the cradle to the grave, and should an employee die in service they would look after their family. Basically the employees have been molly coddled into expecting very high salaries, pensions and welfare care so welcome to the real world and the conditions that most of us face now.
So - you start your post admitting you worked there 20 to 30 years ago, and then presume to describe what the conditions for staff are like now ? Needless to say things have changed a rather more than you can possibly imagine in the mean time.
[quote][p][bold]Nearly an OAP[/bold] wrote: I worked for IBM at North Harbour, Portsmouth in the 80s and the conditions of the IBMers (as they were called) was second to none. This company who I believe are Mormons looked after their full time staff from the cradle to the grave, and should an employee die in service they would look after their family. Basically the employees have been molly coddled into expecting very high salaries, pensions and welfare care so welcome to the real world and the conditions that most of us face now.[/p][/quote]So - you start your post admitting you worked there 20 to 30 years ago, and then presume to describe what the conditions for staff are like now ? Needless to say things have changed a rather more than you can possibly imagine in the mean time. 10 Minute Man
  • Score: 0

12:39pm Thu 20 Aug 09

Jerry Parsons says...

I worked for IBM until an MBO in the mid 90's; I'm sorry to say that whilst things may have changed somewhat, there is still an air of superiority amongst some stafe & a feeling that the recession can't touch IBM!
I worked for IBM until an MBO in the mid 90's; I'm sorry to say that whilst things may have changed somewhat, there is still an air of superiority amongst some stafe & a feeling that the recession can't touch IBM! Jerry Parsons
  • Score: 0

12:41pm Thu 20 Aug 09

Nearly an OAP says...

I'm sure that 10 Minute Man, Bitterne would agree that most workers conditions have changed dramatically since the 80s - mine certainly have. Many workers have been made redundant, firms have closed, workers have taken pay cuts, seen final salaried pension schemes abolished and legislation that took decades to achieve for their benefit scrapped. I'm sure that IBMers will never end up destitute and I know that many have left or have been made redundant since those halcyon days of the 80s but I'm sure they will fare better than most of us.
I'm sure that 10 Minute Man, Bitterne would agree that most workers conditions have changed dramatically since the 80s - mine certainly have. Many workers have been made redundant, firms have closed, workers have taken pay cuts, seen final salaried pension schemes abolished and legislation that took decades to achieve for their benefit scrapped. I'm sure that IBMers will never end up destitute and I know that many have left or have been made redundant since those halcyon days of the 80s but I'm sure they will fare better than most of us. Nearly an OAP
  • Score: 0

12:59pm Thu 20 Aug 09

SotonJohn says...

Nearly an OAP wrote:
I worked for IBM at North Harbour, Portsmouth in the 80s and the conditions of the IBMers (as they were called) was second to none. This company who I believe are Mormons looked after their full time staff from the cradle to the grave, and should an employee die in service they would look after their family. Basically the employees have been molly coddled into expecting very high salaries, pensions and welfare care so welcome to the real world and the conditions that most of us face now.
Can't comment on first part of N OAP's post, but it never ceases to amaze me that people who think they are worse off then someone else want them brought down to their level.

Why not have a bit of ambition and say if that's better, then that's what I'm going to achieve/fight for.

Don't bring people down to your level N OAP aspire to equal what they've got/achieved.
[quote][p][bold]Nearly an OAP[/bold] wrote: I worked for IBM at North Harbour, Portsmouth in the 80s and the conditions of the IBMers (as they were called) was second to none. This company who I believe are Mormons looked after their full time staff from the cradle to the grave, and should an employee die in service they would look after their family. Basically the employees have been molly coddled into expecting very high salaries, pensions and welfare care so welcome to the real world and the conditions that most of us face now.[/p][/quote]Can't comment on first part of N OAP's post, but it never ceases to amaze me that people who think they are worse off then someone else want them brought down to their level. Why not have a bit of ambition and say if that's better, then that's what I'm going to achieve/fight for. Don't bring people down to your level N OAP aspire to equal what they've got/achieved. SotonJohn
  • Score: 0

1:06pm Thu 20 Aug 09

Nearly an OAP says...

SotonJohn. I'm very pleased with my employment now as I see a lot of people who are worse off than me or are long term unemployed. Good luck to anybody who has better conditions than me BUT things were better by far in the not too distant past.
SotonJohn. I'm very pleased with my employment now as I see a lot of people who are worse off than me or are long term unemployed. Good luck to anybody who has better conditions than me BUT things were better by far in the not too distant past. Nearly an OAP
  • Score: 0

1:27pm Thu 20 Aug 09

Andy Locks Heath says...

Was nodding sagely at NOAP's comments that IBM are "morons" until I realise I had misread it. In fact the Watson family who founded IBM were Quakers, not morons, - sorry, mormons. One minor concession to history was the absolute ban of alcohol on IBM premises with the threat of dismissal even if only brought in as shopping or awarded as a leaving present. IBM's social clubs were not permitted to sell spirits though luckily IBM had a solution to that problem as well- it closed them all down.
Was nodding sagely at NOAP's comments that IBM are "morons" until I realise I had misread it. In fact the Watson family who founded IBM were Quakers, not morons, - sorry, mormons. One minor concession to history was the absolute ban of alcohol on IBM premises with the threat of dismissal even if only brought in as shopping or awarded as a leaving present. IBM's social clubs were not permitted to sell spirits though luckily IBM had a solution to that problem as well- it closed them all down. Andy Locks Heath
  • Score: 0

2:55pm Thu 20 Aug 09

mjh says...

IBM is not unique in this respect; I have worked for another IT Consultancy for 36 years which was taken over by Atos Origin a few years ago. As a French company, it had a company policy of defined contribution pension schemes only, so our generous final salary scheme was closed to all members last year and it was only by the strong intervention of our scheme trustees that adequate provision and compensation was made for people who stood to lose the most (principally those in their mid-late 40s with over 20 years service). At least I am close to retirement, but I find myself in a scheme which will no longer increase the pension paid in line with inflation, for which we only got a whole 5% uplift "up-front". This country has gone from having enviable private pension provision for many people to a situation where the only way to get a decent pension is to be a civil servant.
IBM is not unique in this respect; I have worked for another IT Consultancy for 36 years which was taken over by Atos Origin a few years ago. As a French company, it had a company policy of defined contribution pension schemes only, so our generous final salary scheme was closed to all members last year and it was only by the strong intervention of our scheme trustees that adequate provision and compensation was made for people who stood to lose the most (principally those in their mid-late 40s with over 20 years service). At least I am close to retirement, but I find myself in a scheme which will no longer increase the pension paid in line with inflation, for which we only got a whole 5% uplift "up-front". This country has gone from having enviable private pension provision for many people to a situation where the only way to get a decent pension is to be a civil servant. mjh
  • Score: 0

2:58pm Thu 20 Aug 09

veryblue says...

It's a shame that petty jealousy has crept into this. Remember that IBM has been a leader in many ways, and where IBM leads, many follow. Final Salary Schemes may be on the way out, but there are many other aspects to this that are brutal and unnecessary given the very healthy state of IBM's finances. The truth is that the company is now driven by Executives who are paid the same sort of bonuses as the Bank employees, and therefore it is in their interest to increase share price. Doing this by managing out the most loyal and experienced staff is very shortsighted.
It's a shame that petty jealousy has crept into this. Remember that IBM has been a leader in many ways, and where IBM leads, many follow. Final Salary Schemes may be on the way out, but there are many other aspects to this that are brutal and unnecessary given the very healthy state of IBM's finances. The truth is that the company is now driven by Executives who are paid the same sort of bonuses as the Bank employees, and therefore it is in their interest to increase share price. Doing this by managing out the most loyal and experienced staff is very shortsighted. veryblue
  • Score: 0

3:01pm Thu 20 Aug 09

goard says...

My nephew started his career at IBM and the CV was overweight with recommendation. He has gone far now, BUT have a thought for employees that have been there for years and unfortunately they have to compete with countries far and wide. Best of luck.

goard
My nephew started his career at IBM and the CV was overweight with recommendation. He has gone far now, BUT have a thought for employees that have been there for years and unfortunately they have to compete with countries far and wide. Best of luck. goard goard
  • Score: 0

11:44am Fri 21 Aug 09

mikers says...

I currently work for IBM. My father also worked for IBM, so I have known the company and the way it treats it's employees all my life.

IBM and IBMers have a core set of values. The company is built upon trust and integrity. IBMers pride themselves on not just designing great products, but on the ethical way our company carries out it's business. This is what really differentiates IBM from other companies.

Four years ago, there was a pensions shake up in IBM. At the time the IBM UK director, made a promise to employees that the 'C plan' (final salary plan) was fully funded and safe until at least 2012.
A few weeks ago, the company entered a legally required consultation phase, with a mind to closing the final salary plan. The consultation phase is legally required. However IBM are not required to pay any attention to the consultation, it's just a rubber stamping process.

The employee representitives taking part in the consultation are being denied access to independant legal advice and are not being told under what criteria IBM would decide to halt their plans to close the final salary pension scheme.

Personally, I would benefit from the closure of the final salary scheme. I am not in the scheme, my pension would see an uplift as a result of the closure. However, I am wholly opposed to the proposal.

I regard this proposal as a total betrayment of IBM's staff by senior management. It goes completely against the ethics upon which IBM was built.

My views are echoed by every single member of staff I speak to.

IBM may plead poverty, but that is not the case. I cannot disclose figures, but the company is healthy financially. Let's just say that we were rumoured to be in talks to purchase the computer company "Sun" recently (Suns yearly revenue is about $13billion). Had we gone ahead with the purchase, it is said that we would still have $6 billion of cash in the bank. That's enough to buy a cheeseburger for every person on the planet (but not fries too!).

Morale in IBM UK is at an all time low. I predict that as soon as the job market improves, there will be a mass exodus of talent from IBM.

I was once proude to be an IBMer, now all I feel is shame.

Thomas Watson, IBM's founder must be spinning in his grave.
I currently work for IBM. My father also worked for IBM, so I have known the company and the way it treats it's employees all my life. IBM and IBMers have a core set of values. The company is built upon trust and integrity. IBMers pride themselves on not just designing great products, but on the ethical way our company carries out it's business. This is what really differentiates IBM from other companies. Four years ago, there was a pensions shake up in IBM. At the time the IBM UK director, made a promise to employees that the 'C plan' (final salary plan) was fully funded and safe until at least 2012. A few weeks ago, the company entered a legally required consultation phase, with a mind to closing the final salary plan. The consultation phase is legally required. However IBM are not required to pay any attention to the consultation, it's just a rubber stamping process. The employee representitives taking part in the consultation are being denied access to independant legal advice and are not being told under what criteria IBM would decide to halt their plans to close the final salary pension scheme. Personally, I would benefit from the closure of the final salary scheme. I am not in the scheme, my pension would see an uplift as a result of the closure. However, I am wholly opposed to the proposal. I regard this proposal as a total betrayment of IBM's staff by senior management. It goes completely against the ethics upon which IBM was built. My views are echoed by every single member of staff I speak to. IBM may plead poverty, but that is not the case. I cannot disclose figures, but the company is healthy financially. Let's just say that we were rumoured to be in talks to purchase the computer company "Sun" recently (Suns yearly revenue is about $13billion). Had we gone ahead with the purchase, it is said that we would still have $6 billion of cash in the bank. That's enough to buy a cheeseburger for every person on the planet (but not fries too!). Morale in IBM UK is at an all time low. I predict that as soon as the job market improves, there will be a mass exodus of talent from IBM. I was once proude to be an IBMer, now all I feel is shame. Thomas Watson, IBM's founder must be spinning in his grave. mikers
  • Score: 0

10:49am Sun 23 Aug 09

Shafted Again says...

The early comments here are out of tocuh with the reality on how IBM has changed in the last 10-15yrs. The latter comments are closer to the reality. Also it appears it is not the closure of the Final Pension that is the main issue here, though I am sure those who work in IBM may disagree, but the punitive terms surounding the changes making IBM workers so angry. How would you like the Govt to close all forms of Redundancy payments for lossing your job, or that companies can change your Pension terms as they like (which they can do now anyway) so that the situation is so bad you have no choice but to leave. Like being fired for doing a great job but as your over 45 yrs old and you have carefully scrimped and saved for a pension you have to loose your job, or loose more of your pension if you retire early. How would you like to be forced to leave your job when the company you work for is not only Very cash rich, but revenues are increasing year on year. So there is no excuse other than profit at cost of employee trust, loyalty, and total loss of faith while the company tries to sell the world as being a good corporate citizen and a socially resposnible company. Maybe this is why so many IBM employees are joining Unions. If this method of pension changes becomes the norm to increase profits (Financial crisis is a good reason to do this now) as HR executives watch what other companies do, then Redundancy payments are a thing of the past, replaced by making major punitive pension changes so you force your older and loyaly workforce out at no cost, other than eventual impact to the UK tax payer. Remember the Consultation proces also means nothing, any company can make changes, they are required by law to listen to employees, explain the changes yet still implement as they wish, their legal responsibility is to listen and explain, hear the employees views,wishes and desires. Then do what they want. This is the reality.
The early comments here are out of tocuh with the reality on how IBM has changed in the last 10-15yrs. The latter comments are closer to the reality. Also it appears it is not the closure of the Final Pension that is the main issue here, though I am sure those who work in IBM may disagree, but the punitive terms surounding the changes making IBM workers so angry. How would you like the Govt to close all forms of Redundancy payments for lossing your job, or that companies can change your Pension terms as they like (which they can do now anyway) so that the situation is so bad you have no choice but to leave. Like being fired for doing a great job but as your over 45 yrs old and you have carefully scrimped and saved for a pension you have to loose your job, or loose more of your pension if you retire early. How would you like to be forced to leave your job when the company you work for is not only Very cash rich, but revenues are increasing year on year. So there is no excuse other than profit at cost of employee trust, loyalty, and total loss of faith while the company tries to sell the world as being a good corporate citizen and a socially resposnible company. Maybe this is why so many IBM employees are joining Unions. If this method of pension changes becomes the norm to increase profits (Financial crisis is a good reason to do this now) as HR executives watch what other companies do, then Redundancy payments are a thing of the past, replaced by making major punitive pension changes so you force your older and loyaly workforce out at no cost, other than eventual impact to the UK tax payer. Remember the Consultation proces also means nothing, any company can make changes, they are required by law to listen to employees, explain the changes yet still implement as they wish, their legal responsibility is to listen and explain, hear the employees views,wishes and desires. Then do what they want. This is the reality. Shafted Again
  • Score: 0

8:30am Tue 25 Aug 09

Trustworthy says...

I have experience as an IBM manager and much of the following can be deduced from http://www.amipp.org
.uk/phorum5
The truth of the matter appears to be that IBM UK is controlled by IBM US and the change in the pension scheme is a vehicle to save costs, increase profitability, issue the increased dividend promised to shareholders and manipulate the share price.

No doubt that this proposed change in the pension scheme is being driven by IBM top executives so that they be will be able to award themselves more $millions in bonus payments.

IBM top executives appear to have litttle interest in keeping IBM a long-term truly profitable and progressive company. Some of the current IBM top executives are here today and will be gone tomorrow.
(Remember Lou Gerstner IBM CEO from 1993 to 2002. He was somewhat of a longer termer. He was appointed when IBM was an ailing company.
However, “upon his departure from IBM, Gerstner received a 10-year consultancy contract worth up to $2 million annually, plus expenses and full use of IBM facilities and services, such as office, cars, aircraft and financial planning. He is only required to work one month out of the year.”
See http://en.wikipedia.
org/wiki/Louis_V._Ge
rstner,_Jr.).

It is likely that the current IBM UK top executives are in charge just for the short term and are being used as hatchet men.

A shocking part of the pension scheme changes proposed is the alleged plan to increase the percentage per year that pension scheme members leaving IBM have deducted from their pension from 3% to 7%.
So for example:
Today if a 55 year old leaves IBM UK they will lose 24% of their final salary pension.
The proposals will mean that they will lose 56% of their final salary pension.

IBM UK is being forced to downgrade the pension provision with a linked forced scheme to lay people off and ship their jobs to less costly job markets such as China and India.
The lay off of people will not be done by making people redundant as that will cost IBM UK in redundancy payments. It is being done by the means of artificial quotas being forced on managers to downgrade their assessments of their employees’ job performance. IBM UK will then be able to claim that those employees do not perform satisfactorily and will sack them.
I have experience as an IBM manager and much of the following can be deduced from http://www.amipp.org .uk/phorum5 The truth of the matter appears to be that IBM UK is controlled by IBM US and the change in the pension scheme is a vehicle to save costs, increase profitability, issue the increased dividend promised to shareholders and manipulate the share price. No doubt that this proposed change in the pension scheme is being driven by IBM top executives so that they be will be able to award themselves more $millions in bonus payments. IBM top executives appear to have litttle interest in keeping IBM a long-term truly profitable and progressive company. Some of the current IBM top executives are here today and will be gone tomorrow. (Remember Lou Gerstner IBM CEO from 1993 to 2002. He was somewhat of a longer termer. He was appointed when IBM was an ailing company. However, “upon his departure from IBM, Gerstner received a 10-year consultancy contract worth up to $2 million annually, plus expenses and full use of IBM facilities and services, such as office, cars, aircraft and financial planning. He is only required to work one month out of the year.” See http://en.wikipedia. org/wiki/Louis_V._Ge rstner,_Jr.). It is likely that the current IBM UK top executives are in charge just for the short term and are being used as hatchet men. A shocking part of the pension scheme changes proposed is the alleged plan to increase the percentage per year that pension scheme members leaving IBM have deducted from their pension from 3% to 7%. So for example: Today if a 55 year old leaves IBM UK they will lose 24% of their final salary pension. The proposals will mean that they will lose 56% of their final salary pension. IBM UK is being forced to downgrade the pension provision with a linked forced scheme to lay people off and ship their jobs to less costly job markets such as China and India. The lay off of people will not be done by making people redundant as that will cost IBM UK in redundancy payments. It is being done by the means of artificial quotas being forced on managers to downgrade their assessments of their employees’ job performance. IBM UK will then be able to claim that those employees do not perform satisfactorily and will sack them. Trustworthy
  • Score: 0

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