Vote May Force Changes to IBM’s Pension Plan

International Business Machines Corp. on Tuesday will disclose results of a vote that could repeal changes to its pension plan. The changes had sparked plans for a protest at the annual shareholders meeting.

An employee-led group of shareholders has proposed a resolution that would ensure that all IBM workers get the same pension benefits. Investors will vote on the plan at the meeting in Cleveland. The world’s largest computer maker also will unveil a buyback of as much as $3.5 billion of its stock, analysts said.

Investors have been choosing sides on the pension proposal, which is opposed by IBM management. IBM workers, members of Congress and union leaders plan a rally after the meeting.

“Employees will be coming and speaking, telling from the heart why it [the current pension system] is wrong,” said Jimmy Leas, an 18-year IBM employee who wrote the proposal.

Even if the resolution doesn’t pass, supporters hope to get more than 3% of shareholders’ votes. Under Securities and Exchange Commission guidelines, that support would require IBM to put the proposal on the ballot at the annual meeting in 2001.

The proposal is intended to blunt the consequences of a so-called cash-balance pension system that IBM began in July. The plan lets workers accumulate benefits steadily over their careers.

By comparison, employees in IBM’s conventional pension plan accrue most of their benefits in the last few years before they stop working.

Support for the resolution has been building in the past month. Last week, the New York state pension fund and Institutional Shareholder Services, a company that provides proxy research and voting services to institutional investors, said they favor the proposal.

The California Public Employees Retirement System, or CalPERS, threw its support behind the measure last month, and the Marco Consulting Group will vote its 2.5 million IBM shares for the employee-backed resolution.

On the other hand, State Street Corp., IBM’s largest investor, said it generally supports executive teams such as IBM’s that have performed well for investors. State Street declined to say how it will vote.

IBM shares fell $1 Thursday to close at $104 on the New York Stock Exchange.