London Retiree Club Meeting. (29th January 2002)

This report by Dave Mitchell and Brian Marks. Parts that are analysis rather than reporting are in curly brackets thus {italicised}.

This was held at IBM's Bedfont site on 29th Jan 2002. You will recall that the 2001 meeting was a rowdy affair and the level of dissatisfaction with IBM and the Trust defied valiant efforts to keep the meeting structured.

One of the ramifications of this was that the recording of that meeting was effectively unusable so the meat of 2001 did not get into the minutes. The only comprehensive accounts of the 2001 meeting are in London Retirees Club AGM Report 2001.

To avoid a repetition of contention the chairman explained he would not take input from the audience on other than social, cultural and educational matters. { It might be argued that the 2001 meeting was very educational, but nobody did! }. Additionally, the pre-printed order of events in the Agenda was changed to move "Any Other Business" and the closing of the meeting before the guest speakers. The minutes of this 2002 meeting will not cover the guest speakers and ensuing discussion because they were moved outside of the formal retiree meeting.

The minutes for what the presenters said in 2001 could be reconstructed by the presenters. As a result, there were ten pages of minutes, seven of them devoted to the 2001 guest speakers section. These minutes were available for the first time in the hand-out for the meeting. There was some criticism of the limited time available for the audience to absorb the minutes before "Matters Arising". The minutes were accepted as in the handout. The point was made that Barry Morley resigned because he felt he could not do his trustee duty under the regime he encountered. {It will be interesting to see if that makes it to the 2002 minutes.}

All seemed well on the reporting of the club's finances, the 2001 outings and the schedule for 2002. All the officers were re-elected unopposed. The meeting formally closed, with about an hour to go before tea and biscuits time.

Kevin Waller then presented about the Funds, David Newman about the world-wide company finances and about Myners. Here are the statistics we managed to jot down:

  • Fund Performance in 2001: -8%
  • -2% in 2000 - first time in 30 years that two consecutive years show decrease.
  • Actuary requires +8%, so shortfall is 16%

  • NB UK stockmarket was down 18%, and Japan's down 27%

  • £3.5B total funds at end of 2001
  • £4.1B total funds at end of 2000

  • DB fund has:
    • 7000 actives
    • 9000 pensioners
    • pays out £10M a month

  • DC fund has 11000 members
      £118M in the fund

  • There will be an autumn election for MNDs. (Member Nominated Directors = elected trustees)

  • IBM W/W performance: 
        revenue $86B (+3%)
    h/w -12%
    s/w +3%
    services +5%
    profit after tax$ 7.7B (-5%)
    earnings/share -4%

  • Myners Summary:
    • IBM UK UK Trust investments OK: 
              50% UK equities
        25% overseas equities
        20% bonds
         5% property
    • issue of the ownership of pension fund surplus will be considered by law commission
    • David Newman opinion that 2+years before any proposals

  • IBM is 25th largest UK pension fund 
        benchmarked against top 50
    performance is second quartile of these 
	      (i.e. worse than top 12, better than bottom 25 funds)

Dave Mitchell asked about the renewal of the arrangements for elections, arrangements which will expire, according to current regulations, before the next election. Kevin Waller expected parliament to approve an extension to the lifetime of the current arrangements. See Elected Trustees for background on the regulations.

{The Myners bit was curious. David started by saying that our pensions would be "unaffected" and then went on to talk about how they might be affected by new regulations on the use of surplus. Maybe his intention was just to mention the Myners bits that were covered in the recent website newsletter but he had not put in his mailing about the Myners Review. For background on this see the links at the bottom of his mailing}.

Much of the rest was exchanges between Brian Marks and David and Kevin. The exchanges followed last year's pattern. There was not dispute about the statistics - IBM bottom of the league over the companies and periods that the Trust uses to measure itself against, pensions losing value at about 1% a year when matching leading companies would have them gaining value. The David&Kevin line was to discount pensions in payment as not a major part in the totality of what we should judge our pensions by. That may not align with the views of members - one commented that he thought his recent increase was reasonable until he noted it was per-year and not per-month!

Management Information Letter 785 got a mention. This is the one where there is a Q&A for which the question is:

"Why do pensions in payment increases not reflect the full RPI?"

There is no dispute that the question is about pensions in payment. The answer begins:

"As in all compensation and benefit matters, we aim to compete favourably with the practice of other leading companies."

You might think that statement is about the treatment of pensions in payment, particularly as it includes pensions-in-payment in "all compensation and benefit matters". Kevin Waller thinks that the context of the statement determines that it does not say that IBM aimed to have its "pensions in payment" policy compete with "leading companies". You can read all the context at MIL785.doc

{It is good news is that Kevin is not saying the statement is irrelevant, or from somebody whose views should be discounted, he is just saying the statement is not about the pensions in payment practice of leading companies. (Or, possibly, that it does say something about that and the something is contradicted elsewhere.) Kevin is normally sensible and one of the people we would like to see involved in restoring the members' trust and confidence in their pension providers. What Kevin Waller (or Brian Marks) thinks the answer says is less important than what the preponderence of readers in 1986 thought.}

{There is no suggestion that MIL 785 has been withdrawn or replaced, so your current view also matters.}

Overall then, the London AGM has been split into two meetings, a formal one in which pensions are not discussable, and an informal one in which they are discussed. This devaluation of pensions concerns at a retiree AGM makes the existence of the website as a forum and activity centre even more important.

{London retirees have been given a slight taste of the agenda control which, at a more sinister level, has contributed to the elected trustees being unable to fulfill their intended role.}

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