Q. Are there any specific rules defining “early out” retirement packages offered to employees? Our company is planning to offer early outs. Our criteria mandate that an employee must have worked 15 years and be at least 50 years old. But we have employees who have worked as long as 28 years, but fail to meet the 50-year-old criterion. Is this age discrimination in a reverse sort of way? —T.G., Florida
A. Early retirement programs such as the one you're considering are very common and generally lawful. Depending on the specific structure of your plan, you may face ERISA compliance issues. But your concern about reverse age discrimination is without merit. Courts generally don't recognize such claims.
We do have one practical concern about your program: It seems too generous. We're accustomed to seeing “rule of 75” or “rule of 80” programs. That is, you may retire when your age and years of service add up to 75 or 80 years. Your proposed program would create a rule of 65, which is—while not illegal—well outside the norm in terms of generosity.
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