Age Discrimination Pension Changes
A number of changes to the pension plans have been agreed between the Company and the Trustee, following a review of the effects of the Employment Equality (Age) Regulations 2006 on the Plan benefit structure. The main changes are as follows:
Defined Benefit changes
Accrual after Normal Retirement Age
Employees who are active members of the Defined Benefit Sections of the IBM pension plans (C, N, I and DSL Plans) and remain in employment after their Normal Retirement Date will have the following options:
• To start receiving their pension from their Normal Retirement Age and commence membership of the Defined Contribution Section (M Plan)
• To continue to accrue further benefits in the Defined Benefit Section up to the date they start to receive their pension. This will require continued Smart* contributions and will allow the continuation of ASCs and/or AVCs
• To cease membership of the Defined Benefit Section and postpone payment of their pension until a later date. Their pension will receive an actuarial uplift in respect of the period of postponement. Employees will be able to commence membership of the Defined Contribution Section (M Plan)
• The upper age limit of 63 for membership of M Plan will be increased to 65.
Deferred Members
Members with a deferred benefit will be able to start receiving their pension from their Normal Retirement Date or postpone payment until a later date. Their pension will receive an actuarial uplift in respect of the period of postponement.
C Plan Supplement
A supplement is payable to members who joined the C Plan on or before 5 October 1990. The supplement for men is based on pensionable service up to 5 August 2008 and for women, pensionable service between 6 May 1990 and 5 August 2008.
The supplement is paid for 24 months between the ages of 63 and 65 provided a member retires at or after age 60. The period of payment will reduce where members work beyond the age of 63.
A new supplement will be payable to all C Plan members who joined the Plan on or before 5 October 1990 for service after 5 August 2008. The supplement is payable from the member's actual retirement date, regardless of age and ceases when the member reaches age 65.
The new supplement accrues at the rate of 0.25% of the Basic State Pension for each year of pensionable service from 6 August 2008. If the member retires prior to age 60, an early retirement factor is applied.
The Company and the Trustee are currently discussing the treatment of the supplement for the period from 1 December 2006 (when the age discrimination legislation came into effect) to 5 August 2008 inclusive. Details will be posted on the website once an agreement has been reached.
Defined Contribution changes
Accrual after Normal Retirement Age
Employees who are active members of M Plan and remain in employment after their Normal Retirement Age will be able to continue their membership.
The upper age limit of 63 for membership of M Plan will be increased to 65.
Death in Service after Normal Retirement Age
In the event of the death in service of a member who has postponed their retirement, the pension payable to a spouse will also include pensionable service after Normal Retirement Age.
Enhanced M Plan Contribution Rates
When the Enhanced M Plan was originally introduced in 2006, the Company contribution rates for active members between the ages of 50 and 59 was 20% (or 18% for a former I Plan member) before reducing to an 8% rate on reaching the age of 60. It has now been agreed that the higher rate will continue until the member reaches the Normal Retirement Age of the member’s original Defined Benefit Plan.
Archived 12/12/08
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Last Updated: 24/06/2009
