The legal team on Cooper v IBM has negotiated an agreement with
IBM that settles some of the claims and sets the amount of
damages that IBM will pay to the class if IBM's appeal of
the district court's age discrimination rulings is unsuccessful.
The class will receive $320 million regardless of what happens
on appeal, and stands to receive another $1.4 billion if the
appellate court sustains the district court's rulings on the
cash balance formula and on IBM's use of of a unique, age-based
formula when it converted participants' benefits to opening
account balances. The class consists of 3 groups of current
and former IBM employees;
1) People employed on or after Jan 1, 1995 for
more than 5 years. These people were impacted by the Pension
Credit Formula IBM implemented in 1995. This portion of the
class would benefit from both the claims that have been settled
for $300 million and the claims being appealed.
2) People employed on or after July 1, 1999
for more than 5 years. These people were impacted by the Cash
Balance plan IBM implemented in 1999 and would benefit from
the claims being appealed.
3) People employed on July 1, 1999 who left
IBM without vesting in the new cash balance plan. These people
would benefit from the "partial termination" claim that was
settled for $20 million.
Details of how the settlement would be divided
and distributed are still being finalized. Before year end
2004, all class members will receive formal notice of the
settlement and a fairness hearing will be scheduled by the
court where any objections to the settlement agreement can
be raised. At this point, a detailed analysis can be done
so that individuals will be able to project their share of
the settlement. After the fairness hearing is completed and
the settlement is approved, IBM will file their appeal of
the age discrimination claims. This means that if the settlement
ruling is not appealed by any of the class members, payouts
to the partial termination class of the initial $20 million
could begin as early as the second half of 2005 and payouts
of the remaining two classes could begin sometime in 2006.
