UK - Members of the £3.5bn IBM UK Pension Plan expect its shortfall to be £1bn by the end of the year.
The Association of Members of the IBM UK Pension Plan says it estimated the deficit under the financial reporting standard FRS17, by multiplying the company’s average contribution over the past two years - just over £100m with the normal period for clearing a shortfall, five to 10 years.
And AMIPP also pointed out that IBM expected “a further substantial increase” in contributions next year.
IBM Pensions Trust chairman Jim Lamb told members: “In 2003 we saw a recovery in financial markets and the total assets of the plan grew by £488m to stand at £3544m at the end of the year.
“However, due to the falls of the preceding two years the fund assets are less than they were in December 2000. At that time the fund was in surplus. However, with reduced asset values and increased liabilities the fund now has a large deficit.”
An IBM spokesman said it was not company policy to comment on rumour and speculation, but added: “The company has confirmed to the trustee that it remains the company’s current intention to continue to support the plan through the payment of employer contributions.”
IBM increased its annual contributions from £19m in 2002, to £79m in 2003, and to £157m in 2004.
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