A Federal District Court in the Southern District of Illinois ruled that IBM’s cash-balance pension plan violated the age of discrimination provisions of the Employee Retirement Income Security Act of 1974 (ERISA). IBM said it disagrees with the district court’s ruling and would appeal the decision.
The New York Times reported “Judge G. Patrick Murphy of Federal District Court in the Southern District of Illinois ruled that I.B.M. had discriminated against its older workers in several ways when it converted its pension plan because the changes would leave them with smaller benefits at retirement than younger workers would have when they eventually retired.”
Murphy’s ruling is the first of a two-part decision, the court will decide next on how to compensate the affected employees. The class action lawsuit was filed on behalf of more than 130,000 IBM workers and retirees in the United States.
The case is being closely watched by hundreds of Fortune 500 companies that have similar cash-balance pension plans.
(via New York Times)
2 responses so far ↓
David Bailey // Sep 17, 2003 at 7:12 pm
I’ve had a similar experience at Anthem Blue Cross & Blue Shield. I fell one year short in time and age to keep my old Blue Cross association plan and was moved to this new cash balance plan that pays crap for interest. I figure I will have to work another 10 years to make up for my losses.
Jim Robinson // Jan 27, 2004 at 10:53 am
Under our old company plan we had over $800,000,000 in the account. When we were taken over the new company (Duke Energy) changed to a Cash Balance plan and alloted $200,000,000 to provide coverage and stole the remaining $600,000,000.
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