Computer giant IBM is preparing for a tough decision- to close its final salary pension scheme in the UK in order to preserve competitiveness. They are planning introduce greater predictability to long-term pension provision costs. The company is consulting its staff about proposals to close its UK scheme, which would affect around 5,000 employees (which represents a quarter of the 20,000 UK employees). Staff will be consulted for 60 days from 5 August 2009, and a decision will be made following the feedback, reports The Independent. IBM will take a final step towards this in April 2010 after a period of legally mandated consultation.In his e-mail sent to employees about this plan, Brendon Riley, general manager, IBM UK and Ireland, wrote, "The rapidly-rising costs and liabilities associated with the provision of defined benefit pensions is placing pressure on our long-term ability to invest for future growth and operate in an intensely competitive global market."With this announcement, IBM has joined other companies (mostly UK subsidiaries of overseas companies) like HP, Fujitsu, BT Group, Aon, who have already proposed similar actions in order to cut costs in the present economic climate.
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