UK - IBM scheme members have accused the pensions ombudsman of ‘misinterpreting the law' for rejecting their complaints that the company had stripped their pension benefits.
The Association of Members of the IBM UK Pension Plan said the ombudsman, David Laverick, had misunderstood their complaints, failed to properly investigate the matter and used ”faulty logic” in making his determination.
The landmark 67-page decision has taken more than four years to be handed down.
AMIPP members claimed IBM UK had closed its final salary scheme illegally in 1996 and used reserves to set up a defined contribution plan.
They also complained the computer giant failed to increase pensions in payment in line with inflation despite earlier promises that retirement benefits would be competitive with industry standards - a move that caused thousands of retired members to lose up to a third of their expected pensions.
But the ombudsman found there was “no possibility of legal redress” for the complainants.
Laverick said: “I have not gone as far as the complainant would wish in exploring whether his former employer has honoured the bargain he says was struck when he exchanged his skills for a prospective pension or whether IBM has continued to compare favourably with other employers. This is because I see no legally enforceable promise in either context.”
Scheme trustee Brian Marks said: “His report describes behaviour that a typical person would find reprehensible, yet the investigator finds nobody to blame.
“Either the ombudsman has misinterpreted the law, or the law has not protected the reasonable expectations of the scheme members.”
AMIPP has three weeks to appeal the decision.
This week's edition of Professional Pensions is out now.
Ben Gunnee reflects on 2018 and talks about the Fiduciary Management trends to keep an eye on in 2019
Lloyds Banking Group secured 630,000 new pension customers last year, according to its 2018 annual results.
Guy Opperman has rejected calls to speed up changes to auto-enrolment (AE) despite increasing pressure to boost contribution rates and overall savings pots.