2002 IBM Stockholder Resolution on Pension and Retirement Medical

Please read and cosponsor by filling out the form found at the bottom of this page.

Resolved: shareholders request that the Board adopt the following policy:

Age discrimination in retirement policies will be ended by allowing all
employees, regardless of age, to receive the same long-promised
retirement medical insurance and pension choice as employees who were
within five years of retirement in 1999.

In 1999 IBM announced new cash balance pension and retirement medical
insurance plans. These plans effectively revoked long-promised plans for
many employees.

IBM divided employees into three permanent groups based on their age on
June 30, 1999. Employees older than 50 with 15 years of service kept the
old medical and could choose between the old and new pension plans.
Employees older than 40 with ten years of service could also chose
between pension plans but were forced into the new retirement medical.
Employees younger than 40 and older employees who did not have at least
10 years of service were forced into both the new medical and the new
cash balance pension. IBM thus broke its highly touted and unqualified
promise not to discriminate based on age.

According to BNA’s March 7, 2001 Employment Discrimination Report, "the
Internal Revenue Service has put a hold on the agency's approval of new
cash balance plans pending an examination of the age discrimination
implications of such arrangements. Since 1999, EEOC has joined with the
Treasury Department and the Labor Department in a coordinated review to
decide whether cash balance plans can be squared with federal age
discrimination laws." Whatever the outcomes, IBM’s age discrimination
will have serious consequences for effected employees.

IBM openly acknowledged that the average employee would lose 20% of
retirement pay under the cash balance plan. The Wall Street Journal
estimated losses as high as 50%.

IBM also acknowledged to some employees that their new individual medical
insurance accounts would probably run out of money as they approach old
age. Revoking lifetime medical insurance is especially a problem for
lower-paid workers.

IBM management argues that the cash balance plan is better to attract
younger workers. If so, why are younger workers the only age group not
offered a choice of pension plans?

Conversion to cash balance pension plan failed to benefit the company.
IBM declared that the $200 million "saved" would fund stock options for
executives and other targeted employees. However, the "savings" actually
accumulate as a surplus in the separate pension trust fund. Money cannot
be transferred to IBM from this fund. Moreover IBM has paid nothing for
pensions for the last six years because the $70 billion pension trust
fund has a large surplus and earns more in interest than it pays out to
retirees.

In short, the cash balance plan conversion brought no money into the
company, saved no money, had no apparent advantages for stockholders,
opened the company to investigation and possible suits for age
discrimination, generated negative publicity, and may well have had
material adverse effects on the morale of company employees. Therefore,
IBM should end age discrimination in retirement policies.

Please (1) cut and paste the following form into an e-mail,
(2) fill it in and (3) email to:
corpsecy@us.ibm.com, James M. Leas <jolly39@juno.com>
You can also print and mail in hard copy
Please also circulate to friends and colleagues
Deadline: To be listed as a cosponsor IBM must receive before November 12 at 5pm

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Office of the Secretary
International Business Machines Corporation
New Orchard Road
Armonk, NY 10504
Sir:
Please add my name as a cosponsor of the 2002 IBM Stockholder Proposal on Pension and Retirement Medical
submitted by James M. Leas.

Full Name___________________________________________________

Home Street Address_______________________________________

Home State and Zip _______________________________________

Home email address_______________________________________
 
I own at least one share of IBM stock Yes or No? ___________
If yes how many shares _______________
Please provide the following to help IBM identify you as an owner of shares
If you know the FCTC/Equiserve Account # _____________________
and/or name of  broker (including TDSP) ___________________________
 
I am an IBM employee Yes or No?  ___________
I am an IBM retiree Yes or No?   ___________
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