IBM is refusing to give the go-ahead to pure defined contribution (DC) occupational pension contracts in Germany, according to trade union Ver.di.

Ver.di has tried to negotiate a collective bargaining agreement with IBM since after the law to strengthen occupation pensions (Betriebsrentenstärkungsgesetz) came into force in 2018, allowing pure DC contracts, it said.

Under the law, employee and employer representatives negotiate a collective bargaining agreement to offer pure DC – or reine Beitragszusage – schemes for new pension promises for employees, so-called social partner model (Sozialpartnermodell).

The IBM Corporation in Armonk has now decided not to give approval to new occupational pension contracts in Germany, the union added.

“I assume that IBM has rejected the idea of new occupational pension contracts in Germany because of open accounting questions of the company, and we don’t know at the moment if IBM will want to negotiate again on the new occupational pension contracts,” Bert Stach, secretary for the expert group IT/DV at trade union Ver.di told IPE.

Background discussions took place at IBM on ideas to implement a new form of occupational pension arrangement in recent years taking into account regulations in Germany and in the US, and the consequences for the balance sheet (US GAAP) of the company, the union added.

A spokesperson for IBM in Germany told IPE: “We support all employees with a financial contribution to pension schemes, which gives them the opportunity to make their own investments in the pension schemes. We are not planning any changes to this programme and remain fully in line with German law.”

Ver.di will demand compensation or increased private pensions if IBM continues to refuse to negotiate new forms of occupational pensions in the future in Germany, Stach said.

The framework agreement concluded in addition to the salary agreement in 2009 to provide a subsidy for private old-age and survivor provisions, which establishes private pension benefits, remains however in place.

The new occupational pension contracts at IBM in Germany would apply only to employees who do not have an occupational pension contract.

“The employees who already have occupational pension contracts will continue to benefit from occupational pensions under the old contracts. Half of the employees at IBM in Germany had already signed up for occupational pension contracts, until this option was stopped in 2009,” Stach explained.

Until 2009 IBM had a Pensionsfonds as an occupational pension option for its employees in Germany, supplemented by a Contractual Trust Arrangement.

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