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Last Updated: Thursday, 30 September, 2004, 07:42 GMT 08:42 UK
IBM in $320m pension settlement
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IBM remains a heavyweight in the computer industry
Computer giant IBM has agreed a $320m deal with older staff, who had argued that changes to its pension scheme left them worse off.

The deal, which caps the firm's future liability at $1.7bn, must still be approved by a US court.

IBM had earlier feared the pensions dispute could cost it up to $6.5bn.

Older staff complained that their pension was set to be less under the new scheme, introduced in 1999, than the previous plan.

Traditional pension plans reward loyalty to a company, with benefits increasing most in the person's last years with the firm.

Under the new 'cash balance' system, benefits rise at a steady rate every year, disadvantaging older staff who had expected their benefits to rise.

A federal judge hearing the case ruled in favour of the workers earlier this year, but IBM challenged the verdict.




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