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IBM looks to close final salary UK pension scheme

Computing giant IBM has today announced the beginning of a 60 day consultation with members of its final salary pension scheme in the UK. The 5000 members (representing about one quarter of the company's workforce) will hear plans to enhance current defined benefit payments and ultimately close the scheme altogether.

If these proposals are rubberstamped, as seems highly likely, the company's final salary pension scheme would be closed to existing members as well as future members in a trend which has spread far and wide within the UK business community. Many people believe that problems within the UK pension industry can be traced back to Gordon Brown's time at the Treasury when he reduced the tax benefits afforded to pension schemes in order to increase government income. Despite warnings at the time, he ploughed on with his plan which has taken a significant amount of money out of the sector over the years.

It looks highly likely that the final salary pension scheme will soon become a thing of the past with more and more people left with money purchase arrangements which leave them at the beck and call of annuity rates at the time of retirement. If you have any issues with your pension arrangements it is vital that you take professional advice as soon as possible as literally every day could count in the run-up to your retirement.

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