LOS ANGELES, Feb. 19 (UPI) -- In what could be a billion-dollar ruling, a Los Angeles judge says IBM owes retroactive payments to those affected when IBM dropped its pension plan.
U.S. District Judge G. Patrick Murphy ruled 140,000 current and former IBM employees were entitled to retroactive payments for retirement benefits they lost when the company converted to the new plan in 1999.
Murphy ruled last summer IBM's cash-balance plan was inherently discriminatory against older workers under pension law. IBM has estimated the ruling could cost the company $6 billion under one formula, the Los Angeles Times said.
The case, filed in 1999, claimed IBM discriminated against older, long-serving employees when it replaced its pension program with a cash-balance plan.
The Feb. 12 ruling, released Wednesday, is the latest development in a case that could ultimately affect hundreds of big companies that have swapped traditional pensions for so-called cash-balance plans over the last decade.
