IBM Loses Pension Plan Suit, Will Appeal ...

SAN FRANCISCO (Reuters) - International Business Machines Corp.'s IBM.N pension plan, which it revamped in the 1990s, is unfair to older employees, a federal judge in Illinois ruled on Thursday.

Judge G. Patrick Murphy of the U.S. District Court for the Southern District of Illinois held that IBM's pension plan violated age discrimination provisions of the Employee Retirement Income Security Act.

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"This ruling affects not just IBM's pension plan, but the pension plans of more than 400 major U.S. companies," said J. Randall MacDonald, senior vice president, human resources, in a statement.

"What IBM did with us with the pension plan hurt older people," said Kathi Cooper, who continues to work for IBM from home in Illinois, and who was one of the lead plaintiffs in the lawsuit.

Asked if she would press on in light of IBM's intent to appeal, Cooper said: "Absolutely, what IBM did was unconscionable."

Among other changes, the newer, "cash balance" defined contribution plan allowed for employees who left IBM for other companies the option of receiving accumulated benefits as a lump sump, instead of waiting to retire to realize benefits.

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IBM's move to the cash-balance plan echoed those by many other large technology companies in the 1990s, such as AT&T Corp., Eastman Kodak Co., and Electronic Data Systems Corp.

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http://www.reuters.com/newsArticle.jhtml;jsessionid=3O4WMGYOY3BCCCRBAEKSFEY?type=technologyNews&storyID=3200334

...every chance it gets. Typical big corprat - self-serving. I hear about it all the time.

I know some contractors who work there and IBM cut payments to their contracting company (who cut contractors wages) THREE times in as many years. IBM did this after they told the contracting companies and contractors they would not do it again (after the second cut).

Bastards.

PS - during the quarters that IBM did this, they had made a profit. So, what was their reason for doing this? 1. greed, 2. because they can.

Bastards.

Dear IBMer:

In late 1999, a lawsuit was filed which alleged that IBM violated age discrimination laws when it changed its U.S. pension plan in 1995 and 1999. IBM has been defending this lawsuit to preserve our pension plan. Despite our efforts, earlier this afternoon, the U.S. Federal District Court in Illinois ruled that IBM’s current pension formulas violate the age discrimination provisions of federal pension law. We strongly disagree with this ruling. IBM will appeal, and we believe we will prevail.

Let me reassure you that IBM’s pension plan does not discriminate on the basis of age -- or any other factor. Indeed, to suggest that our pension plan is age discriminatory is an affront to this company and every employee. IBM has a longstanding record of providing industry-leading benefits for employees and has continued to do so in the face of sweeping changes in this company, this industry and this country.

This ruling threatens not only IBM’s pension plan, but also the plans of hundreds of other companies who have adopted similar formulas. Indeed, the court’s reasoning would go farther and invalidate scores of other pension plans, some of which have been in existence since the 1930s. The ruling is also contrary to other district court decisions.

We are continuing to analyze the ruling to fully understand all its ramifications. I ask for your patience and understanding as we work through these complex and technical issues. In the meantime, we will provide regular updates on w3.

Like many of you, I hope for a successful conclusion to this case. We are confident that the underlying illogic of this ruling will be acknowledged as we move through the appeal process.


Sincerely,

Randy MacDonald
Senior Vice President, Human Resources

Companies across the country were hoping IBM would win this one in hopes they could also screw their employees in the same way.

But I believe this is not the last of it, count on the Chimp to figure out a way to overrule this, just like the Fair Labor Standards Act he's screwing over too....