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Last Updated: Thursday, 26 January 2006, 16:54 GMT
IBM holds off on pension decision
Worker outside IBM offices in Chicago
IBM is currently considering the future of its UK pensions
Computer giant IBM is continuing to hold talks with employees about changes to its UK pension scheme.

The announcement comes amid speculation it is set to close its final salary pension scheme to existing members.

IBM said it has not yet made a final decision and is still discussing any changes with staff.

However, the group did say that the proposals it had outlined to staff so far did not include the "cessation of defined benefit plans".

The company has been holding talks with senior managers to outline its plans to deal with the deficit in the company's UK pension fund.

About one-third of its 20,000 UK staff are members of its final salary pension scheme, which closed to new members several years ago.

Earlier this month, IBM told its staff in the US that it would be closing its final salary scheme to its current members from January 2008.

The US scheme had already been closed to new entrants since 2005.

New trend

Over the last few years in the UK, there has been a growing trend among pension funds to close final salary schemes in the private sector to new members.

New employees are typically being offered membership of money-purchase schemes instead.

But in recent months, some big employers have announced the closure of their final salary schemes to their current members as well.

Employers such as Rentokil, the Co-op group and the Yorkshire and Clydesdale banks are now planning to offer existing staff cheaper, less generous, pensions instead.

Other companies, including the retail group Arcadia, Scottish & Newcastle brewers and the financial services company Provident Financial, have, as an alternative, increased substantially the contributions required from members.


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