based on a formula encompassing their years of service and in many cases, their final salary
In addition to or instead of the popular 401(k) retirement accounts, many employers have instituted “cash balance” plans, which portray a participant's benefit as a lump sum amount that increases over time, and, in prac- tice, pay most benefits in the form of lump sums. The shift to cash balance plans has prompted lawsuits by employees who allege that the new plans discriminate against older workers by reducing the size of their future retirement benefit. The most prominent court case involves IBM, which in 2004 agreed in a settlement to pay $320 million to more than 130,000 employees who sued the company, contending that the company’s cash balance plan discriminated against older workers. At the time this publication was written, litiga- tion was pending on the legality of IBM’s cash balance plan, and Congress was debating whether to pass legislation to clarify the legal status of such plans. AARP believes that the law should be clarified to ensure that older workers are protected when any pension plan changes to a cash balance plan.
Age Discrimination in the American Workplace: Old at a Young Age This book by Raymond F. Gregory (Rutgers University Press, New Brunswick, New Jersey, 2001) discusses age discrimination issues including early retirement plans, promotions, demotions and transfers, and analyzes how courts have dealt with these matters.
AARP’s Employer Resource Center www.aarp.org/money/careers/employer resourcecenter: The AARP website contains a wealth of information to assist employers in preventing age discrimination and to aid older workers in understanding their rights. It also includes “best practices” and tips on issues such as recruitment and creating workplaces that are attractive to older workers.
Equal Employment Opportunity Commission www.eeoc.gov: Here you can read the text and regulations of the Age Discrimination in Employment Act, as well as information on lit- igation, enforcement procedures, and statistics on age discrimination charges and their resolution.
Staying Ahead of the Curve 2004: Employer Best Practices for Mature Workers A study conducted for AARP by Mercer Human Resources Consulting, describes best practices of employers honored as “AARP Best Employers for Workers Over 50.”
Staying Ahead of the Curve 2003: The AARP Working in Retirement Study A survey of what “working retirees” say they are looking for in a job.