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| Pensioners accuse IBM of stealing fund surplus |
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| BY GEORGINA GUEDES, ITWEB JOURNALIST |
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[Johannesburg, 13 November 2003] -
Protesting outside IBM's offices in Sandton this morning, previous employees say the company used the surplus of their pension fund to finance its retrenchment schemes.This is the culmination of a six-year-long battle in which pensioners have rallied against decisions they say were taken unilaterally by IBM.“Their strategy is to deny pensioners their increases and to boost the surplus for their own use,” says Roger Hull, an IBM pensioner on the fund's board of trustees. “They changed the rules to give them control by their own appointed trustees. To get any motion through, six out of eight trustees have to agree, so nothing we need to do for the benefits of our pensioners gets through.”
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Taking a stand
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IBM changes the rules to suit itself, say angry pensioners. |
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On top of this, Hull says IBM has retained the right to veto any motion that does get passed by the board, which renders them incapable of changing the fund to bring its rules in line with the Pension Funds Act.According to Hull, in 1996, IBM implemented a strategy to keep pension increases at two-thirds of the Consumer Price Index, and to delay increases in order to grow the fund surplus. This is in spite of IBM's undertaking to provide pensions “comparable to the leading employers in our industry”. The increases were only released in 2001 after complaints from the Pensioner Action Group.He adds that since IBM's return to SA in 1996, the company has not contributed in any way to the pension fund, leaving contributions from employees as the only source of income for the fund.Among the other complaints were accusations that IBM used the surplus of the fund to finance retrenchment schemes to the value of over R100 million, and that it transferred millions of rand to a members' reserve in the IBM-defined contribution fund which is now reserved for the company's exclusive use.The pensioners handed over a letter to be sent to Samuel Palmisano, New York-based president of the IBM Group. The letter gives IBM 14 days to respond before further legal action will be taken.“We will consider the letter, and give it the utmost attention,” says Phindiwe Gweba, communications manager at IBM, South Africa. She declined further comment.
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