Union Unite is predicting staff at IBM will walk out, opting for early retirement, rather than accept reduced pensions from the firm. IBM, along with dozens of other firms, is stopping its final salary pension scheme in order to cut costs. But Unite said today it expects between 700 and 1,000 people will opt for early …
Consultation not negotiation
"Big Blue and its workers have been negotiating since July" - hardly. What's been happening is a (legally required) consultation exercise. Few people held out any hope that IBM's proposed changes would be altered in any substantial way as a result, and surprise, surprise, they haven't been.
Shows how much more the public sector are paid because of their massive pensions. No wonder the unions are fighting hard to keep them! A police officer would need to put away 60% of his salary to get the same pension in the private sector.
same for the rest of us.
i saw my final salary pension vanish at my old place. the new scheme was utter toss, yet us younger ones were getting a hell of a lot less put in our pension whilst the older guys saw roughly 3x the comapany contribution we did. so effectively we were subsidising people who were getting almost full final salary, whilst ours wasnt worth pissing on. apparently its not ageist to make younger people's pensions considerably less valuable.
at the new place and i dont even have a pension. i will buy a 2nd and hopefully 3rd house to cover this. i just dont see the point in pensions after seeing my dad and his mates pensions go from a decent figure to virtually nothing.
So stick to your guns and walk out before April 2011. If one won't give, neither should the other.
Too many folk roll (bend) over and take whatever scraps are thrown to them, and big companies take advantage of it. It's about time the "sheeple" (popular phrase which I detest) put their necks on the line and risked something in order to get the idea that big companies can hose everyone around them to keep their CEO's bonuses.
I'm bordering on turning this into a political rant, so I'll stop here.
Why is this happening?
Because Sam made a promise to Wall Street that Earnings Per Share (EPS) would hit $10 - $11 by 2010. How can you achieve this when revenues are falling? By cutting expenses, not just the cost of stationery but all expenses including salaries and pension costs. Sam has done a great job of achieving this, in 2008 he predicted $9.20 for 2009, he has actually likely to achieve $9.70.
Take a look at this analysis http://seekingalpha.com/article/149843-the-arithmetic-behind-ibm-s-2009-eps-guidance-revision
So who benefits from this EPS Increase? Well Sam and probably his senior managers have targets for EPS, Sam is paid primarily in shares (circa $20M) and of course he gets a very healthy pension pot topped up every year by the company.
The rest of the employees have to make do with average salaries and there pension which is rapidly losing value (UK Pension Pot lost over £150m in value based on the last report).
Its time the board of directors considered the employees as well as the shareholders and the government protected the workforce from this form of theft.
"i will buy a 2nd and hopefully 3rd house"
Look mushforbrains, houses are places to live. Houses are, just in case you and your buy-to-let mates have really not noticed what's happened in the last couple of years, not means of generating an investment income for the longterm. Houses decay over time and therefore will *cost* you money to keep well maintained. You and your mates have been fooled by the City spiv mortgage brokers who wanted their upfront bonuses on mortgages which were immediately heading for negative equity - but they didn't care 'cos they'd got their bonuses.
Shares don't seem to be as reliable as the one-time "masters of the universe" promised us either - don't blame Gordon Brown for the defined contribution pension disaster (there's plenty other stuff to blame him for) , blame the CBI's pension holidays a decade or two back, and the recent state of the FTSE. Land as an investment, now that's a slightly different question.
Buy-to-let = interest-only 125% mortgages = financial insanity = major contributor to sad state of UK plc today.
[political rant? You betcha]
@The Original Ash
"So stick to your guns and walk out before April 2011. If one won't give, neither should the other."
These are probably guys in their mid to late 50's. Walk out and into what job?
@AC Why this is happening...
Because it looks nicer to say the bloke took early retirement as we moved his job offshore. ;-)
Seriously the issue is that workers who have been with the company for a long time have had great benefits that companies are finding out that they don't have to provide with the newer workforce. So as the mentality of the worker shifts from putting in 25+ years at the same old job to putting in time and moving out to move up, the longer term pension benefits are worth less to this more mobile workforce.
The sad truth is that IBM is cutting corners everywhere all in the name of better margins. The BoD is only concerned with their fiduciary responsibility and this translates to short term fiscal gains. When Sam retires, you should cash out and run away from this company.
Time to start training those teenagers...
We're gonna need a whole lot of COBOL programmers, real soon now.
Not a surprise
There have been changes recently in the rules regarding the taxation of pensions, retirement plans, etc, here in the US. It made a lot of news locally because it affected, of all things, the local football team. They had one of the oldest (and best) coaching staffs in the NFL, but two or three of the coaches were forced into early retirement because, by continuing to work, it would have cost them millions in paying taxes on their pensions/retirement funds/401Ks/whatevers.
Of course, now that they have retired, the accountants and lawyers figured out a way for them to be retired but work as "consultants".
Better financial management required
Every time the stock market sustains a downturn the news is full of pension schemes being in the red, then surprise surprise they're in the black again once the stockmarket recovers. Pension providers ought to be able to plan for this and offer a fair deal throughout the economic cycle.
people can't just walk out...
this is all part of the evil that is globalizatiion, if you walk they'll (IBM, in this case) will simply move the work to India/China, wherever is convenient.
There is always lots left over and even more left over for top level management in these cases. The only fix for this is to limit trade and job movement to countries of an approximately equal salary/benefit scale.
Big corporations can't figure out enough ways to screw people over fast enough. Outsourcing = shafting employees. Offshoring = shafting employees.
Here, we have a nice retirement present for you. It's this pole coated with sandpaper. Bend over.
IBM loves it when a plan comes together
The article talks about people walking out as if IBM would be concerned by that? IBM will be delighted to see 1000 of its' more expensive employees leave to either contribute towards their required workforce reduction or be replaced by much lower paid people. The cynic in me would suggest it is exactly the outcome they would have hoped for.
Good will works both ways
Leaving is playing into their hands.
Staff should work to rule as many work way in excess of their set hours. That would really start to hit the bigger corporations, they may find they need to attract additional staff to cover this extra work.
Good will and faith is a two way thing.
re:Union Predicts Retirement Surge at IBM
Hummm... Sam P. to get 40-60 million ($) in retirement benefits!! If this is even half true IBM should be ashamed of itself. *NO ONE* is worth that much. I do not care if he was the President of the USA he should not be getting anything close to it. I am a IBM stockholder and I have voted consistently against the outrageous salaries of IBM executives.
They have consistently over the last 20 years screwed the company up so bad that I almost expect them to ask for TARP funds so they can cut people (and benefits) and increase executive salaries.
If they do I will out in the streets protesting loud and picket sign in my hand.