The U.S. Supreme Court today refused to review a landmark federal appeals court decision holding that IBM Corp.'s cash balance plan does not discriminate against the company's older workers.
The decision affirms an Aug. 7, 2006, ruling by a three-judge panel of the 7th Circuit Court of Appeals in Chicago. That panel reversed a 2003 ruling by the U.S. District Court in East St. Louis, Ill., holding that IBM's $48 billion cash balance plan was discriminatory because it gave younger workers more time than older workers to earn interest on benefits.
In a statement, James A. Klein, president of the American Benefits Council, Washington, said: "This action by the Supreme Court confirms the well-reasoned decision by the lower court and, along with the recent Pension Protection Act, validates the view that cash balance and other hybrid pension plans are perfectly legal and not age discriminatory."
Armonk, N.Y.-based IBM had agreed to pay up to $1.4 billion to the plaintiffs if it didn't win the case on appeal.