The current contract says retiring employees will receive health benefits until age 65 or until they become eligible for Medicare. However, it also provided a retirement incentive that provided employees 100% of their last year’s salary if they retire by August 31 after attaining age 55. The board withdrew that latter provision, based on its reading of two federal court decisions: Erie County Association vs. County of Erie and AARP vs. Equal Employment Opportunity Commission , according to the (Wilkes Barre, Pennsylvania) Times Leader.
The federal ruling, which is being appealed, was based on a practice where retired employees below age 65 were given better health-care coverage than those who were eligible for Medicare. Health-care coverage to fill the gap between the time of retirement and when a employee is eligible for Medicare was ruled to be age discrimination by the federal court (see Federal Judge Tosses EEOC Retiree Health Benefit Exemption ).
Three of the five educators represented in the most recent action had intended to retire this year, but changed their mind because of the board’s change in the incentive package, according to The Citizen’s Voice. “We were denied early retirement incentives,” Clare Myers, one of the five, said, according to the report. “We are going to have to pay something no one else had to.”
The retirement incentives that were offered are illegal, said John “Jack” Dean, the school board solicitor, according to the report. “This has nothing to do with age,” Dean said. “We have to comply with the law.”
In the AARP case, the lobbying group had challenged an April 2004 EEOC rule that attempted to clarify that employers would not be construed as violating the Age Discrimination in Employment Act (ADEA) if they provide greater health benefits to individuals who retiree early and are not yet eligible for Medicare than they provide to retirees who are 65 or older and qualify for Medicare benefits (See EEOC Approves ‘Erie County’ Exemption ). Supporters of the EEOC rule had argued that employers facing skyrocketing costs might stop offering retiree benefits if they were forced to provide the same level of care to younger and older retirees.