IBM, the giant computer and software maker, has agreed to settle all but two claims in a lawsuit accusing the company of having a pension plan that discriminated against older workers, in exchange for a limit of US$1.4billion on its potential liability.

The company says it will take a US$320-million third-quarter charge to cover this settlement and another reached earlier this year.

Wednesday’s settlement, which still requires court approval, allows IBM to pursue its appeal of the final two claims related to the formula it used to establish employee’s cash balances when the company revamped its pension plans.

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