August 7, 2006 3:26 PM PDT

IBM comes out on top in age discrimination suit

A federal appeals court has ruled in favor of IBM in an age discrimination suit concerning a change in pension plans that the plaintiffs said favored younger workers.

The case, Cooper vs. IBM, was filed on behalf of 140,000 older IBM employees in the wake of Big Blue's 1999 decision to switch its pension coverage to a "cash-balance" plan. In the new plan, all IBM employees receive the same pay credit (5 percent) and interest credit each year regardless of age. The change to a cash-balance system has proven controversial among older workers--as well as shareholders--because a dollar earned by a younger worker has more time to accrue in value. In more traditional pension plans, the value of benefits increases at a faster rate for older workers.

A federal judge ruled in favor of the plaintiffs, led by now-retired IBM employee Kathi Cooper, in 2003. IBM simultaneously negotiated a settlement and filed an appeal with the Chicago-based 7th U.S. Circuit Court of Appeals.

The American Benefits Council, a nonprofit organization that supports privately sponsored pension plans and had filed an amicus brief on behalf of IBM in late 2005--cosigned by such corporations as Honeywell, AT&T and Wells Fargo--applauded the court's decision. Council President James A. Klein said the verdict "should settle this matter once and for all," adding that "cash balance and other hybrid plans are--and always have been--perfectly legal and not age discriminatory."

Klein cited the apparent success of the Pension Protection Act, a bill that recently passed the Senate and which he says "clearly affirms the legitimacy of hybrid pension plan designs."

Now that its settlement is void, pension plan controversies may be over for the Armonk, N.Y.-based IBM. Earlier this year, the company froze its pension fund and announced a transition to 401(K) plans. "We are gratified that the Court of Appeals has vindicated IBM's long-held position that its pension plan formula is both lawful and age-neutral," the company wrote in a statement. "Treating the time value of money as a form of discrimination is not sensible."

Cooper, however, claims that the case still has momentum and has no plans to give it up.

The plaintiff's counsel was unavailable for comment.

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What is wrong with this article!
It says in part that the "Court of Appeals has vindicated IBM's long-held position that its pension plan formula is both lawful and age-neutral," and the company wrote in a statement. "Treating the time value of money as a form of discrimination is not sensible."; and, with Cooper, however claiming "that the case still has momentum and has no plans to give it up." then what is apparently needed are further details/explanation/clarifications of the pension plan "formula" that was presented by IBM for independent analyses on the method of treatment of "the time value of money"!
Posted by Captain_Spock (894 comments )
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"The PBGC & Employer Protection Act"
The Pension Protection Act, while it does a few token things to protect pensions, doesn't go far enough. On top of that, it takes a lot of previous pension protections away from employees!

The net effect is that employees went one step forward & were set three steps back. But, all Congress & the Senate told the press was that it was one step forward for employees.

The Pension Protection Act is over 900 pages long. I've read the whole thing. It protects taxpayers, company executives, and corporate stockholders more.

It should have been named:
"The PBGC Protection Act"
or
"The Employer Protection Act"

Get this: If a Pension Fund falls below 80% funded, then by the new law, employees cannot accrue any more benefits until the plan funding catches up & exceeds 80%. Sounds fair, right? But get this...

...if a Pension Fund falls below 60% funded, by the new law, company executives cannot accrue any more benefits until the plan funding catches up & exceeds 60%.

So, if you were an executive, where would you fund your plan? Well, you would fund it at least 60% full, so you could continue to get annual accrued benefits for the executives! But, you wouldn't fund it over 80%, because then you have to start saving to pay the employees!

So, a company is still incented to always UNDERFUND their pension plan by at least 20% !!!

How stupid is this? Well, it wasn't a mistake...it was INTENTIONAL.

Congress & the Senate have been bought big time. Each month by month democracy whittles away. Americans are frogs in a pot of water.

Never mind that attorneys (Congress & Senate) shouldn't do math. The fact is, they are very smart & can do math. They are hoping that the average GM, Boeing, IBM, Delta, American, & Northwestern employee can't.

Certainly the media can't. They can't report on any of this correctly...they just parrot what the American Benefits Council (lobbiest group for employeers) tell them. And if they don't want to cite the ABC Council, there are 30 other lobbiest groups all willing to give "positive, spin-happy quotes" telling Americans what a good deal this is for them.

You want to know the really scary part? Now that corporations have the legal right to steal from employees pensions, the next thing will be that it's found to be legal for City, Local, & State governments that have promised pensions.

This will be the 2nd phase of the "Taxpayer & Government Protection Act"...but they'll call it the "State, City, & Local Government Employee Pension Protection Plan".

The last people that stole money from pensions in this brash of a manner were collectively called "The Mafia."

There is just so much pension money out there that it's too tempting not to steal a little bit of it for everyone...that is every federal, state, or city legislator & company exec that is.

They are stealing pension money away from Americans while telling them that their protecting them! Who is the last group who said, "Hey! You gotta pay me for some protection!" Well, the message is the same...it's just being packaged differently: instead of a threat, it's now just a lie.
Posted by ProgrammedCellDeath (1 comment )
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