IBM Sees $250 Million Charge If U.K. Pension Appeal UnsuccessfulAlex Barinka
IBM appealed a ruling that it unfairly changed its U.K. pension plan -- a bid that if unsuccessful, could result in a one-time charge of about $250 million.
If International Business Machines Corp. loses, the company would also have to reverse the changes made to its U.K. defined benefit pension plan and pay benefit-related accruals, in addition to the one-time charge, IBM said Tuesday in a filing. A decision on the appeal is not expected until at least 2016.
IBM is seeking declaration that it acted lawfully in notifying the trustee that it was closing the U.K. defined benefits plan to future accruals for most participants and implementing a new retirement policy, according to the document.
The appeal follows a 2014 ruling that IBM’s change in its U.K. pension plan, which cut benefits to 5,000 employees, breached the company’s duty to those workers, London Judge Nicholas Warren said in a 430-page ruling in April 2014. The tech company made the changes, dubbed “Project Waltz” in a bid to reduce a deficit of 890 million pounds ($1.39 billion).
The company is also the defendant in about 290 individual actions brought since 2010 by participants in the defined benefits plan who left IBM U.K., according to the filing.
Steve Tomasco, a spokesman for IBM, declined to comment beyond the filing.
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