October 2003

Recent Court Cases on Cash Balance Plans

In our article “Disclosing Cash Balance Formulas” (August 2003), we noted that the courts had not found these types of plans to discriminate based on age. Recently, however, the U.S. District Court in the Southern District of Illinois ruled that IBM’s cash balance plan discriminated against older workers. This decision may impact the pending pension suits against ATT and Cigna. IBM believes it will prevail upon its appeal of the ruling.

We recommend that CPAs interested in these cash balance plans constantly monitor the courts for relevant rulings. CPAs may also want to read the court’s ruling and related news articles on the IBM case.

Russell F. Briner, CPA
Marshall K. Pitman, CPA

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