IBM Considering Closure of UK Pension Scheme

July 9, 2009 ( - IBM is consulting on the closure of its final-salary pension scheme to current members of its UK and Republic of Ireland workforce.

According to BBC News, more than a quarter of IBM’s 20,000 UK staff will be affected. IBM said staff would be consulted on the proposed changes for 60 days starting August 5, and that it would only make a final decision following employee feedback.

The scheme closed to new members a few years ago.

The BBC reported that in an e-mail to staff, IBM’s UK and Ireland general manager Brendon Riley said: “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.”

Riley said he understood the plans to end the final-salary or defined-benefit pension scheme would be “sensitive and difficult for many”, but were responsible and necessary to ensure IBM UK’s future industry leadership.

The plan includes enhancements to the defined contribution plan for all IBM UK employees

According to Reuters, last month, fuel producer BP said it would close its final salary scheme for new UK employees joining the company after April 2010, and Barclays said it planned to curtail its final salary scheme for British staff in favor of a cheaper arrangement.