We are doing this because ultimately, this new way allows us to control our retirement expenses and at the same time preserve benefits. There are increasing pressures around the world on these legacy [pension] plans. We are one of the few in all of the IT industry that have these . . . plans.

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In recent years, IBM has been following a global strategy to move toward defined-contribution retirement plans for both existing employees and new hires. These changes are consistent with this direction and will give us more predictable retirement plan costs, along with benefits that remain ahead of — but more in line with — our competitors.

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It's all about cost-competitiveness, so that we could continue to be the financially viable company that we are.

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We're taking these actions to better control retirement plan expenses, position the company for business growth and competitive strength, and preserve employees' earned retirement benefits. We also believe these are prudent and balanced steps at a time of uncertainty and conflicting legislative and regulatory directions about defined-benefit retirement plans in the United States.

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