Pension ruling could affect scores of US companies

The New York Times reports IBM will pay $320m to these workers. The case may affect millions of workers at many companies and non-profit organisations. Under the settlement, IBM\'s liability in the case will be limited to an additional $1.4bn if the courts uphold a ruling that a new pension plan discriminates against its older workers and is illegal. The agreement came as Judge G Patrick Murphy of the Federal District Court in Southern Illinois was preparing to rule on how much IBM should pay to some 130 000 current and former employees. The judge had ruled a year ago that the company discriminated against its older workers in the 1990s when it changed its traditional pension plan twice, leaving them with what is known as a cash-balance plan. A cash-balance plan combines some features of traditional pensions with other features of traditional plans. Since 1995, a fifth of large companies have converted their traditional defined-benefit pension plans, which pay a monthly sum based on salary and years of work, to cash-balance plans, which allow employees to accrue benefits at a fixed rate over their careers. A switch to cash-balance plans can cause older workers to lose a chunk of their benefits. Full report in the New York Times