IBM to transfer German staff to DC plan
IBM’s campaign to slash worldwide pension costs has spread to Germany, where the computer giant aims to save several hundred million euros by transferring 11,000 employees from defined benefit schemes to a defined contribution (DC) one.
IBM employs 22,000 people in Germany. Roughly half of them are in DB schemes. The other half is in a DC scheme introduced in mid-2000.
“Developments on financial markets along with a higher life expectancy have meant that costs related to retirement provision keep going up,” IBM Deutschland says. “As a result, the company’s management has decided to amend pension plans for a multitude of workers and is ready to negotiate the changes.”
If the worker representatives at the firm agree to the changes, IBM Deutschland says its anticipated German pension costs for 2006 could be cut “several hundred million euros”.
A spokesman for the Stuttgart-based firm says employees would keep benefits accrued from the DB schemes.
But representatives told a German magazine “management can expect plenty of resistance, because the workers are in a good legal position and cherish their retirement provision”.