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IBM to close final salary pension scheme

LONDON
Wed Jul 8, 2009 9:45pm EDT

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The IBM logo in a file photo. REUTERS/Philippe Wojazer

LONDON (Reuters) - IBM (IBM.N) said on Wednesday it planned to close its final salary pension scheme in the UK in order to become more competitive and make long-term pension costs more predictable.

The IT giant said it had started a 60-day consultation with about 5,000 members of its final salary scheme, representing a quarter of its staff in the UK.

"(The) proposals include enhancements to the defined contribution plan for all IBM UK employees and closure of the defined benefit plans for existing members," the company said in a statement.

Over the past five years, higher costs have accelerated the trend of UK corporates closing down their final salary pension schemes.

Last month, oil major BP (BP.L) said it would close its final salary scheme for new UK employees joining the company after April 2010, while Barclays (BARC.L) said it planned to curtail its final salary scheme for British staff in favour of a cheaper arrangement.

IBM said that defined benefits accrued to date would be protected.

(Reporting by Paul Sandle; Editing by Mike Nesbit)


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