Magazine article Workforce Management

Pre-65 Retirees: Can They Have It Better?

Magazine article Workforce Management

Pre-65 Retirees: Can They Have It Better?

Article excerpt

WHETHER AN EMPLOYER can provide a richer benefits package for younger retirees remains an unresolved question, dependent upon the outcome of an acrimonious battle between the AARP and federal officials.

The latest twist in the convoluted dispute, which nearly requires a legal license to unravel, occurred in September, when a federal judge reversed her previous injunction against a proposed rule change by the Equal Employment Opportunity Commission. But U.S. District Judge Anita B. Brody stayed her decision to allow AARP officials the opportunity to appeal.

The group's lawyers filed the paperwork last month.

At issue is whether companies can design benefits more generously for pre-65 retirees than for those eligible to receive Medicare. The conflict stems from a 2000 court decision involving Erie County, Pennsylvania. The appellate court ruled that the county of Erie couldn't provide a richer package for younger retirees without violating the Age Discrimination in Employment Act.

The Erie County decision sent "a shock wave through the employer community at that time," says Paul Dennett, vice president of health policy at the American Benefits Council, which advocates on benefits issues for Fortune 500 companies. "Employers aren't intending to discriminate against older retirees," he says. "It's simply logical that benefits are designed, when you become age 65, to be wrapped around your primary coverage at that stage, which is Medicare."

As time passed, EEOC officials said they became concerned about a potential chilling effect. …

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