A federal court ruled yesterday that I.B.M. violated age discrimination laws in the way it changed its traditional pension plan in the 1990's.

The decision could cast doubt over similar changes hundreds of companies have made in plans covering millions of workers, and I.B.M. said it would appeal.

Judge G. Patrick Murphy of Federal District Court in the Southern District of Illinois ruled that I.B.M. had discriminated against its older workers in several ways when it converted its pension plan because the changes would leave them with smaller benefits at retirement than younger workers would have when they eventually retired.

I.B.M. changed its plan twice. In 1995, it switched to a hybrid called a pension equity plan, and in 1999 it converted to what is called a cash-balance plan. That type combines some features of traditional pensions, which provide a defined benefit at retirement, with other features of 401(k) retirement plans. Both of I.B.M.'s changes took away some benefits from older workers and gave them less time than their younger colleagues to build up new ones.

Even though I.B.M. made various concessions after the 1999 changes caused an uproar, Judge Murphy found that those concessions still offered insufficient protection to older workers.

His ruling dealt only with liability, and Judge Murphy said the court would turn next to the question of how to compensate the affected employees ・an especially difficult issue now because market forces have magnified pension costs to all companies, including I.B.M.

The lawsuit has been certified a class action, covering about 130,000 I.B.M. workers and retirees in the United States. Court documents show that I.B.M. projected it would save billions of dollars in pension costs over the years after the changes took effect. Some of that was to be used to create pensions for executives.

"All cash-balance plans would be viewed as age discriminatory" if the ruling is upheld on appeal, said David M. Speier, senior consulting actuary with Watson Wyatt, a consulting firm that has helped I.B.M. and other companies make changes to their pension plans. Cash-balance plans, which are more common than pension equity plans, cover more than two million employees at hundreds of companies.

The corporate world had hoped that disputes over cash-balance pensions would be resolved this year by regulations being written by the Internal Revenue Service. The I.R.S. approach has been that cash-balance pension plans are not inherently discriminatory and can be designed to treat older workers fairly.

"The court's decision is in sharp tension with the Treasury's regulatory position," said J. Mark Iwry, a senior fellow at the Brookings Institution and a former benefits tax counsel at the Treasury Department.

It was unclear what effect the new ruling might have on the creation of those regulations. There are also bills pending in Congress that would resolve the legal issues raised by pension conversions.

An I.B.M. spokeswoman said the company planned an immediate appeal. She said it was not clear whether an appeal could be granted before Judge Murphy addressed the question of compensation.

"We stand by our plan and believe it does not discriminate on the basis of age," said the spokeswoman, Kendra Collins. "Under the court's interpretation of the law, every cash-balance plan is illegal."

In his ruling, Judge Murphy considered whether I.B.M.'s pension changes treated employees equitably by looking at the amount of benefits older and younger workers would have earned by the time they retired. Both the cash-balance model and the pension equity plan failed this test.

In their traditional design, pension plans reward institutional loyalty by allowing workers to build up the biggest part of their benefit in the years just before they retire. Cash-balance pensions were designed in the 1980's in a different way, letting employees build up their benefits at a steadier rate year by year. In cash-balance plans, the yearly gain is based on interest rates. In pension equity plans, the amount earned each year is linked to each employee's pay.

In either case, younger employees have many years to build up their benefits, Judge Murphy wrote. But employees who are close to retirement age when the pension plan is converted have few years and therefore cannot earn as much. He offered several examples in his ruling.

In addition, Judge Murphy found that certain calculations I.B.M. had done while converting its pension plan had either worsened the effect on older workers or given advantages to younger employees that older ones did not receive. One was the calculation of the benefit amount each worker had earned under the traditional pension plan at the time it was converted.

Judge Murphy also faulted the way I.B.M. dealt with a situation known to pension professionals as wearaway, a period when a new pension plan has been adopted but some employees, in effect, earn no new benefits.

After older I.B.M. employees became aware in 1999 that the pension changes were stripping them of anticipated benefits, there was an outcry that led to Congressional hearings, concessions by I.B.M. and, ultimately, a moratorium by the I.R.S. on approvals of conversions to cash-balance plans by other companies. Some companies have continued to convert their plans since then, anticipating that I.R.S. regulations would resolve the legal questions.

In the meantime, such companies, conscious of the furor at I.B.M., have converted their plans in ways that have tried to reduce the problems of wearaway and disputed balance calculations.

But even these more employee-friendly conversions would apparently fail Judge Murphy's test because they do not address the underlying problem of younger workers having more time to build up their pension balances than older workers.

Judge Murphy also pointed to I.B.M.'s practice ・found at other companies as well ・of including earnings from the pension fund in its corporate profits. This practice is permitted under existing accounting rules but has increasingly troubled securities analysts and others, who say companies may be taking advantage of the pension accounting rules to make their business performance look better than it really is.

In his decision, Judge Murphy noted that I.B.M.'s pension earnings made up 7 percent of the company's profit in 1997, and 13 percent in 2001, after the conversions were in place and the plan was less costly.

Janet Krueger, a former I.B.M. programmer and the leader of a group of employees who joined the lawsuit, said that the ruling gave her a feeling of exoneration. She recalled in an interview that at an I.B.M. shareholders' meeting she had publicly asked the company's chief executive at the time, Louis V. Gerstner Jr., why the employees' lawsuit was not mentioned in the annual report.

"He said, `Because we feel this lawsuit has no merit,' " Ms. Krueger said. "In some ways, I feel exonerated because I've had so many people telling me that I.B.M. didn't really do anything wrong, and you shouldn't be wasting your time."