Did IBMs legal defeat signal the demise of cash balance plans, or just a temporary setback?
Did IBM’s legal defeat signal the demise of cash balance plans, or just a temporary setback? » Legal Limbo » A Clarion Call » Rash Actions Federal Express Corporation’s decision to transition to a cash balance plan this year has been cited as evidence of a resurgence in these controversial plans. Then, a month before its election period was slated to end August 29, the cash balance concept suffered a big defeat when a judge ruled that IBM’s plan discriminated against older workers. However, the Memphis, Tennessee-based express-delivery company remains confident about the legality of its plan, says spokesperson Sandra Munoz. FedEx learned from mistakes made by other companies early in the cash balance era, she says. “We give folks a choice and, if they are enrolled in the traditional plan [and switch], they do not lose those benefits. If they go into the new portable pension plan, when they retire they have the two plans,” she says. “That was a lot of what could have been considered dis
