IBM loses Closely Watched Pension Lawsuit
A federal judge ruled that IBM was guilty of age discrimination when it changed over to a new type of pension plan known as cash balance. In cash balance plans, workers get a lump sum when they leave the company. This type of plan often appeals to younger workers who are more likely to change jobs throughout their careers, but it also cuts the expected benefits of older workers. Workers at IBM felt betrayed when the company switched its pension plan because they did not have enough working years left to take advantage of cash benefit balances, leaving them with much lower pension benefits than expected. A spokesman for IBM said that the company plans to appeal the ruling.
See "IBM loses Closely Watched Pension Lawsuit", Brian Bergstein and Adam Geller, Chicago Tribune, July 31, 2003