Staff in legal fight over pension plan changes at IBM
Computing giant IBM is facing a huge legal challenge from 250 former employees who say they were unfairly dismissed.
The firm is being called on to answer allegations of age discrimination and unfair dismissal from the ex-employees, all of whom are aged between 50 and 60.
They believe they were forced into taking early retirement by the firm, which has its UK headquarters in North Harbour in Portsmouth.
They claim new pension arrangements imposed by the company left them no choice but to leave - because otherwise they would have lost thousands each year from their pension pots.
If the claimants succeed in getting compensation, the total bill could easily run into millions of pounds.
Segensworth-based law firm Now Legal is handling the mass claim.
Solicitor Teja Bains said: 'Many of the claimants are extremely bitter about the way they have been treated by IBM after so many years of loyal service.
'Many had been with the company for all or most of their working life.
'Being effectively forced into early retirement in their 50s came as a great shock and will have had a very significant financial impact on most of the claimants.'
In February and April The News reported how the company was in the midst of a redundancy drive in a bid to move many of its UK jobs to cheaper countries.
Ex-staff allege the change to their pensions was designed to force as many workers as possible to retire early from the company, so IBM could avoid redundancy payments
Mr Bains added: 'They inevitably have suspicions that they were 'managed out of the business' in a way that avoided redundancy payments.'
He said the changes disproportionately affected older workers. That is why they are claiming age discrimination as well as unfair dismissal.
The company said in a statement: 'Throughout the process of changes to IBM defined benefit pension plans - and the introduction of a new early retirement programme - IBM has consulted with relevant employees and complied with all legal requirements.
'Claimants left IBM of their own volition, on favourable early retirement terms. Thus, we will contest these actions, which are without merit.'
PENSIONS CHANGES
Under IBM's old scheme, if staff retired before their 60th birthday they sacrificed three per cent of their pension pot for every year before 60.
So if someone with an annual pension of 40,000 retired at 55, then they would sacrifice 6,000 – leaving an annual pension of 34,000.
But under the new scheme they sacrifice around six per cent for every year before their 63rd birthday.
So the same person retiring at 55 under the new scheme sacrifices 19,200 from that 40,000 annual pension.
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