IBM Ruling grants payments to pensioners

NEW YORK (AP) -- IBM Corp. owes back payments -- possibly worth billions of dollars -- to 140,000 older employees who were harmed when the technology giant converted to a new kind of pension plan in the 1990s, a federal judge has ruled.
The plaintiffs in the case want IBM to make up for what they lost after the company adopted a "cash balance" pension plan, which pays workers a lump sum when they leave the company. A federal judge had ruled last July that the plan amounted to age discrimination because it unfairly penalized older employees.
IBM argued that it shouldn't be forced to make retroactive payments because it could not have foreseen that the judge, G. Patrick Murphy of U.S. District Court in East St. Louis, Ill., would declare the cash balance plan illegal.
Murphy has yet to decide the damages IBM should pay or how the figure will be calculated. Under one formula suggested by the plaintiffs, IBM has estimated the payments would total $6 billion. IBM plans to appeal.