AP: IBM to Freeze $48B Pension Plan in 2008

[question everything]

AP
IBM to Freeze $48B Pension Plan in 2008

Thursday January 5, 5:39 pm ET

By Brian Bergstein, AP Technology Writer
IBM to Freeze $48B Pension Plan in 2008, Enhance 401(k) Benefits for 125,000 Employees in U.S.

BOSTON (AP) -- Furthering corporate America's move away from pensions, International Business Machines Corp. said Thursday it will freeze its $48 billion pension plan in 2008 and instead enhance its 401(k) benefits for its 125,000 U.S. workers.

Nearly all IBM's U.S. employees -- everyone hired before Jan. 1, 2005 -- have pension benefits accruing under a traditional annuity-like plan or a cash-balance plan, which gives workers interest-bearing funds that they can take with them if they leave the company.

But these "defined-benefit" plans are becoming rarer. Companies say the plans carry too many uncertainties, largely because swings in interest rates and investment performances change accounting considerations and the amounts businesses must contribute to their pension funds in a given year.

(snip)

Beginning in 2008, then, IBM workers' pension benefits will be locked in place, based on salary and length of service. The accrual of benefits will stop, meaning future raises or additional years with the company will not signify bigger pension checks upon retirement. Instead, IBM will increase its contribution to its 401(k) plans, in which workers get a defined, predictable amount from the company that they're responsible for investing. IBM will double the percentage of employees' contributions that it matches, to 6 percent of salary; certain employees will be eligible to receive more.

Current retirees will see no changes.



(snip)

http://biz.yahoo.com/ap/060105/ibm_pensions.html?.v=4

[Wickerman]

1. "certain employees will be eligible to receive more"

Always that kicker, huh? Got to keep upper management satiated, fuck the rest of the wage slaves.

[Yupster]

2. Defined Benefit Plans are history

They just don't make any sense for the company.

In a few years the only people who will have defined benefit plans will be government employees.

[Wickerman]

3. I certainly hope that isn't the case

I hate to see them flush all benies as they slow the increases of wages.

And, further on, they damned well better not take this govt employee's benefits. That is the one that (as a certainty) made the work worth the lower pay.

[On the Road]

4. The "Certain Employees" May be Long-Term Ones

When Verizon froze its pension plan, employees with over X years of service were grandfathered under older arrangements. There's a limit to the amount they can screw with their veteran managers.

[Wickerman]

5. the way I read it they would carry the old employees

as of this year. A few certain future "others" would also be given nice bennie packages like the days of old - of course, those would be the ones that could best afford to pay their own freight.

[dubyaD40web]

6. IBM to Freeze $48B Pension Plan in 2008

IBM to Freeze $48B Pension Plan in 2008
By BRIAN BERGSTEIN, AP Technology Writer

BOSTON - Furthering corporate America's move away from pensions, International Business Machines Corp. said Thursday it will freeze its $48 billion pension plan in 2008 and instead enhance its 401(k) benefits for its 125,000 U.S. workers.

Nearly all IBM's U.S. employees — everyone hired before Jan. 1, 2005 — have pension benefits accruing under a traditional annuity-like plan or a cash-balance plan, which gives workers interest-bearing funds that they can take with them if they leave the company.

But these "defined-benefit" plans are becoming rarer. Companies say the plans carry too many uncertainties, largely because swings in interest rates and investment performances change accounting considerations and the amounts businesses must contribute to their pension funds in a given year.

Industrial giants such as IBM and airlines that still carry pension obligations say the costs and complexities hamper their ability to compete with younger, more nimble rivals that aren't saddled with pension obligations.

http://news.yahoo.com/s/ap/ibm_pensions

[HereSince1628]

7. A fully vested retirement plan is really the way to go.

Never accept a promise, get the dollars every payday and put them out of the reach of employers.

[geomon666]

8. IBM?

How the hell is IBM hurting for money? God damn snakes.