IBM pension resolution resurfaces
By Bob Freund
LOUISVILLE, Ky. -- Current and former IBM employees once again will push for a stockholder resolution related to pensions at the company's annual meeting today in Louisville.
For the third year, IBMer James Leas of Vermont and 242 supporters are asking shareholders to nix the company's 1999 cash balance pension plan and a change in health benefits after retirement. The pension plan conversion applies to workers younger than 40 and with fewer than 10 years of service.
"IBM openly acknowledged that the average employee would lose 20 percent of retirement pay under the cash balance plan," the resolution argues. It also protests the changes as "age discrimination."
However, IBM's position has been that the new pension is more attractive to a new generation of more mobile employees. Its benefits package still surpasses most of the rest of an industry in which 75 percent of companies do not offer any pensions, IBM responds.
The pension resolution won about 14 percent of shares voted last year.
A newer resolution brought by a Jacksonville, Fla., shareholder and 442 supporters would sever any link between performance bonuses for top executive and profits that come from pension surpluses. By law, pension money can't be used for company operations, but a portion can be used to calculate earnings.
Executives' pay "should be based on the performance of the company, not on the performance of some trust fund you have an independent firm managing (as is the case with pension money)," said Janet Krueger of Rochester, a former employee and national coordinator for the IBM Employees Benefits Action Coalition.
Neither proposal is likely to win shareholder approval, she said. The initial litigant in an age discrimination suit against IBM, Kathi Cooper of Illinois, also will be at the IBM meeting, Krueger said.
A version of this story appeared in some editions Monday.