Compliance February 17, 2004

IBM Cash Balance Judge: Plaintiffs Due Retroactive Benefits

February 17, 2004 (PLANSPONSOR.com) - US District Judge Patrick Murphy of the US District Court for the Southern District of Illinois has ruled that plaintiffs in the much-debated Cooper versus IBM litigation are entitled to retroactive benefit accruals.
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According to the ERISA Industry Committee (ERIC), Murphy’s latest order does not spell out the precise dollar amount of relief to which plaintiffs would be entitled.   The court argued that employers should have known since 1999 that cash balance plans were age discriminatory, even though the IRS had been issuing determination letters for cash balance plans at that time (See  Murphy’s Law: IBM Loses Cash Balance Ruling ).

The Administration’s recent proposal to define statutory rules for conversions to hybrid plans fails to address existing plan conversions, ERIC said (See  Bush Releases Controversial Cash Balance Proposal )

Murphy’s latest decision is available at:  www.eric.org/forms/uploadFiles/2F110000000A.filename.02-04_cooper_retro.pdf .

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