Their request was submitted in a brief to Murphy on the US District Court in the Southern District of Illinois. With the filing, the employees are looking to tie up some loose ends left over from the original case, where Murphy left unresolved the question of what the workers should receive in damages (See Murphy’s Law: IBM Loses Cash Balance Ruling ), according to a Dow Jones report.
In the request, the current and former employees are asking Murphy to require IBM to recalculate accrued pension benefits with a different formula than initially used. If the court approves the payment request, retired workers would get remedial payments if earlier benefits amounted to less than they would have been under the new formula, and some current employees would see benefits bumped up, according to Doug Sprong, a lawyer for the plaintiffs.
IBM is also required to propose damages under Murphy’s previous ruling, which the company has not yet done. Not surprising, Big Blue is expected to propose that it make no retroactive payments.
Perhaps more importantly the request by the employees represents the latest block in the building controversy surrounding cash balance plans – retirement plans that leave investing to employers and promise fixed benefits yet at the same time are set up as individual accounts, with benefit and interest credits.
On the one side, older workers claim such plans discriminate on an age basis since employers often reset the clock when converting to cash balance plans, bringing older workers’ benefits into line with those of younger workers. In fact, these charges formed the basis for Murphy’s ruling and have since spurred action by Congress.
Last month, the US House of Representatives passed an amendment that would prohibit the Treasury Department from getting involved in efforts to overturn the IBM decision (See Congressional Cash Balance Opponents Tout “Win” ). This came after the agency has been working for nearly a year to finalize rules addressing whether cash balance plans are age discriminatory, long-awaited guidance that had widely been expected to support cash balance plans.