IBM 'moves to axe final salary pension'

Computer giant IBM was said today to be considering closing its defined benefit pension scheme for UK members.

The BBC cited an email from the firm's UK and Ireland general manager Brendon Riley who said the fund's "rapidly-rising" costs were putting pressure on the company's future performance.

Any closure of the scheme - which pays a pension based on the employee's length of service and salary - would reportedly affect more than a quarter of IBM's 20,000 UK staff.

According to the BBC, Mr Riley's email said: "For IBM UK...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."

If the pension scheme's closure goes ahead, IBM would be the latest firm to overhaul its staff pension provision in a bid to save money.

Last month BP announced it was closing its final salary scheme to new members, while bank Barclays said it was shutting its final salary pension altogether and transferring its 18,000 staff members to a hybrid one instead.

Recent research showed the funding shortfall faced by the UK's biggest defined benefit pension schemes nearly doubled during June.

The country's 200 largest defined benefit schemes, including final salary pensions, had a collective deficit of £73bn (€84.5bn) at the end of the month, according to Aon Consulting.