(FORTUNE Magazine) – In late July a federal district court ruled that IBM had violated age-discrimination laws when it switched its pension plan to the "cash balance" version in 1999. But while employee-rights activists are hailing the ruling, some pension experts worry that it could well spell doom for the U.S. pension system.

In order to slash pension costs, hundreds of big companies (including Xerox, AT&T, and Delta) have switched to cash-balance plans, in which benefits accrue evenly over workers' careers instead of ramping up as they age. As FORTUNE reported in March, the Treasury Department proposed new regulations last December that would make it easier for companies that convert their plans to ward off age-discrimination suits. But those rules have yet to be finalized, and no one knows what effect the IBM decision will have on the Treasury proposals.

IBM has said it will appeal. Should it fail, cash-balance plans will likely be rendered illegal, and companies will abandon them. But instead of going back to the traditional plans, experts warn, they'll be far more inclined to dump their pension plans altogether--a perfectly legal action--and replace them with 401(k) plans, in which employees put up most of the cash and bear all the risk. In other words, be careful what you wish for--you might just get it. --Janice Revell