Watch out when offering early retirement based on age — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

Watch out when offering early retirement based on age

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The EEOC has won the first round of a battle against early-retirement incentive plans that are based strictly on age. If you have such a plan, make sure you review its legal status with your attorney.

Recent case: The EEOC sued the Minnesota Department of Corrections, challenging a collective-bargaining agreement that provided an early retirement incentive to some employees.

Essentially, any employee who had three years of service with the Department of Corrections and reached age 55 could retire. The department would then pick up his or her health insurance tab until age 65.

The EEOC said that was unfair to older workers: A 55-year-old with three years of service could get special treatment, while anyone older with three years of service was not eligible. The court agreed. (EEOC v. Minnesota Department of Corrections, et al., No. 08-5252, DC MN, 2010)

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