Minnesota backs away from edge of retirement ‘cliff’

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in Compensation and Benefits,Discrimination and Harassment,Human Resources

The Minnesota state government has settled the last age discrimination claims resulting from early retirement packages offered to state employees. (See “State agencies slapped with age discrimination suits.”)

The final settlement will pay $53,000 to four employees at the Minnesota Bureau of Public Defense.

The suits arose out of early-retirement incentives that offered to pay health insurance premiums for workers retiring at age 55, but not those who retired at an older age. The incentive plan allowed employees who retired before age 55 to continue receiving employer contributions to their health insurance premiums until they turned 65. Critics labeled this practice the “age 55 cliff.”

The EEOC argued that the offers illegally penalized the older workers because of their age.

The EEOC filed lawsuits against five other state agencies, in addition to the Bureau of Public Defense. If the state hadn’t settled, 85 retirees would have been on the hook for approximately $2 million in health insurance premiums.

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