New IBM retirement program guarantees job through 2013

IBM says program is a 'unique' response to U.S. workers looking for ways to transition into retirement

IBM is offering employees who are nearing retirement -- and may be worried about a layoff -- a one-time voluntary program that would ensure their employment through Dec. 31, 2013.

The program, called "Transition to Retirement," would cut a workers schedule and pay, but continue providing full benefits until the job guarantee's expiration date.

The program, described in a letter addressed to IBM managers, "offers participants 70% of their pay for working 60% of their schedule."

Participating employees would receive "the same benefits they do today, most at a full-time level, including health benefits and 401(k) Plus Plan automatic company contributions."

The letter was received by the Alliance@IBM/CWA Local 1701, which made it available. The contents were confirmed by IBM.

In the letter to managers, IBM said that "a number of our employees with skills and knowledge critical to our success are at or nearing retirement eligibility."

The new program provides managers with the ability to forecast their workforce needs and "to better plan for that transition."

Employees enrolling in the program "will also be exempt from any resource actions that may occur during the Transition to Retirement period." In return, "all participants agree to retire on or before December 31, 2013," the letter said.

At the end of last year IBM employed 433,236 worldwide, up from 426,751 in 2010. The workforce totals include wholly owned IBM subsidiaries.

At the same time, IBM has been reducing its U.S. workforce . The most recent cutback came in February, when nearly 1,900 jobs were eliminated, according to the Alliance, which gathers employment data from IBM employees.

In 2006, IBM employed about 127,000 in U.S. The Alliance now estimates the U.S. workforce at around 95,000.

In an email response to questions from Computerworld, IBM spokesman Doug Shelton described the program as "rather unique."

"It's an innovative program to respond to interest from US IBMers who have asked for ways to ease into transition. But it also helps IBM, as we now can better plan for their eventual retirement by preparing to build the skills that they take with them and/or hire behind them, where needed. And the program is totally voluntary," Shelton added.

IBM wouldn't say how many employees will be eligible to participate in the Transition to Retirement program. The program is being tried only in the U.S. at this point, though similar programs may be launched in other countries.

The transition program isn't being offered in lieu of layoffs, or what IBM consistently characterizes as workforce rebalancing.

"IBM is will continue to rebalance its skills and resources based on client needs," said Shelton. He added that the Transition to Retirement program has been developed in response to what employees and business units have been asking for.

Patrick Thibodeau covers SaaS and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at @DCgov, or subscribe to Patrick's RSS feed . His e-mail address is

Copyright © 2012 IDG Communications, Inc.

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