Don Parry toiled at IBM for more than three decades assured that his retirement benefits were guaranteed only to find that nothing is as he expected.

"The mystery is that we don't know what's going to happen," said Parry, who retired to the Jacksonville, Fla. area in 1990 after 32 years with the computer behemoth. "We're sitting in limbo."

This month, IBM announced that the benefits of about 110,000 of its retirees would be administered by Extend Health, a private exchange run by Towers Watson & Co., beginning on Jan. 1. IBM said it was making the move to help protect its retirees from skyrocketing costs.

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