Pension Amendment Not ADEA Violation

May 19, 2010 (PLANSPONSOR.com) – A federal appellate court has ruled that differences in pension benefits between younger and older workers stemming from a plan amendment did not constitute age discrimination.

The 8th U.S. Circuit Court of Appeals ruled that Windstream Communications Inc. did not run afoul of the Age Discrimination in Employment Act (ADEA) when it adopted a plan amendment stepping up pension benefits to younger workers but not changing benefits for older employees.The difference in benefit levels grew out of a difference in pension status and not from a deliberate attempt to short change certain employees because of their age, the 8th Circuit said in Schultz v. Windstream Communications, Inc.

As a result of the plan amendment seven of eight employees targeted in a round of layoffs who were somewhat younger than other laid-off employees, received full pensions while other, older employees received reduced pensions under the pre-amendment terms of the plan.  The employer decided to change the plan so that eight laid-off employees who just missed the eligibility cutoffs under the plan would be eligible for the first early-retirement benefit each would have qualified for if they had been allowed to work for another 18 months.

Citing a U.S. Supreme Court case, the 8th Circuit ruled that an employee has to show that differential benefit treatment was, in fact, motivated by illegal treatment because of age and not a properly determined difference in benefits.

The ruling is here

«