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IBM Deutschland Postpones Move from DB to DC
IPE.com reported that IBM has, at least for now, called off plans to make the move for its German employees because worker representatives opposed it.
According to the IPE.com report, the giant computer and technology services firm wanted to move its German employees not already in a DC plan – who make up half of the 22,000 total German employees – to such a program. That would complete a trend dating back to mid-2000 when half of IBM’s workers first made the DB to DC move.
Officials said moving all
workers to the DC program would save the company “several
hundred million euros.”
But worker representatives at
IBM Deutschland, who must agree to pension plan changes,
turned them down, according to IPE. They said the changes
meant significant benefit cuts, particularly for 4,000
employees who were newer members of the DB scheme.
“IBM’s workers’ council has
since obtained expert opinion that reflects that it is in a
very good legal position to fight the proposed changes to
pension plans,” said Rolf Schmidt, an official from the
Verdi services union that is advising worker
representatives at IBM, according to the report.
The move mirrors a trend affecting scores of US
companies. In efforts to control costs, Canada-based
Nortel and US-based Stride Rite announced plans last
month to move employees from defined benefit pension
plans to defined contribution plans (See
Nortel and Stride Rite Announce Move to DC Plans
). Also last month, G&K Services, Inc., provider of
branded identity apparel programs and facility services
in the US and Canada, announced that it plans to enhance
its defined contribution plans and freeze its defined
benefit plans, effective January 2007 (See
Apparel Company Joins Line of Cos. Freezing DB Plans
).
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