By Brian Tumulty
Gannett News Service

WASHINGTON - Both sides are exaggerating the impact of the recent federal court decision that overturned two pension plan changes IBM made in the 1990s, says the employee who served as lead plaintiff.

"This wild speculation, whether it's on the defendants' part or the class's part, should stop," said Kathi Cooper, the 52-year-old Illinois woman whose pension benefits were dissected by lawyers during the court case.

Cooper spoke by telephone from her mother's Illinois home, where she sought refuge late last week from the phone calls and e-mails that inundated her after the July 31 court ruling that IBM violated a federal age discrimination law that protects workers 40 and older.

Immediately after the decision from U.S. District Judge G. Patrick Murphy of the Southern District of Illinois, IBM executives sent e-mail to employees denouncing the ruling and saying that under the judge's logic "most retirement plans in the U.S. today would flunk the test."

"Well-established programs like Social Security, 401(k) plans and a large number of pension plans would be seen as age discriminatory," IBM told employees. "And no one is making that claim. This ruling has thrown into question the long-term viability of the existing U.S. pension system."

IBM spokeswoman Kendra Collins declined Friday to discuss the e-mail, saying, "I wouldn't comment on internal communications."

The ruling struck down IBM's 1995 pension credit formula plan and a 1999 cash balance pension plan, both of which list employee benefits in an account balance similar to a 401(k). Murphy's ruling stressed that both plans remained traditional defined-benefit plans that pay a life annuity beginning at age 65, and must be evaluated under the federal law the governs such plans.

Murphy made a distinction between an immediately payable benefit - which does increase under both IBM plans - and the benefit that's paid at age 65. He found that as employees get older, the increase in their age 65 benefit gets smaller.

However, Cooper and the lawyers who represent 140,000 IBM employees in the case have not publicly suggested how IBM should correct the deficiency.

Cooper stressed Friday the ultimate remedy will be up to the judge.

IBM, for its part, intends to appeal.

"I have no comment on the appeal other than that we are pursuing it," the IBM spokeswoman said.