December 15, 2004

Sue pension plans enough, and they'll go away: In September IBM agreed to a settlement of up to $1.7 billion in a widely publicized case in which lawyers representing 140,000 workers accusing its plan of discriminating against older workers. That's in no way an isolated case, reports The Deal: "Dozens of corporations are being sued for altering their pension plans, with the potential liabilities running into the hundreds-of-billions of dollars;" shifts from defined-contribution to "cash-balance" plans have been especially controversial. And so what logically happens next? Yep: IBM just announced that new hires won't be entered into pension plans as such at all in the future, but only 401(k) savings plans. Not that 401(k)s are entirely safe from a legal standpoint either, as Delta Air Lines management could tell them.... (all links courtesy Law.com). More: yet another link (from before recent IBM settlement).