Friday 27 February 2015
The IBM litigation
The IBM litigation concerns the most current of pension problems, namely when and how an employer like IBM can close its pension schemes to future accrual in the face of opposition from members. As pension schemes become ever more costly for those that fund them, the ability of employers to bring them to an end becomes ever more important.
This ground breaking case, which has yielded 4 judgments of 1000 sides, has laid down for the first time the employer’s duty of good faith when it decides whether to close the scheme, and what happens if it breaches this duty, along with dealing with a number of other important pension problems along the way.
Barristers from Wilberforce Chambers are involved for all parties, right from the Company (Paul Newman QC, Emily Campbell) through to the representative beneficiary (Ben Faulkner and Bobby Friedman) and the trustee (Jonathan Evans QC, Andrew Mold and Edward Sawyer).
This latest Judgment determines what remedies members are entitled to, after IBM purported to implement a suite of changes to its pension schemes, which Warren J has already found amounted to a breach of IBM’s duties of trust and confidence. It is a substantial victory for over 4,500 members, who will be entitled to have the changes effectively unwound, and who will be entitled to damages for any additional losses they have suffered. This Judgment is not the end of the story, however, as further consequential issues are still to be resolved by Warren J, and IBM has announced its intention to appeal.