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Early Retirement Incentive Plans and the Age Discrimination in Employment Act

By Georgetown University Law Center Workplace Flexibility 2010


Early retirement incentive plans (ERIP) “seek to give incentives to older employees to retire before conventional retirement age. The purpose of these programs is to cut back on salaries and benefits to make way for younger workers.” While some ERIPs might constitute a prohibited act under the Age Discrimination in Employment Act (ADEA), the statute provides an affirmative defense for employers who can prove that the plan is voluntary and “consistent with the purposes” of the Act. Some commentators have suggested that one way to encourage employers to establish bona fide phased retirement programs within their qualified pension plans is to craft an exemption for phased retirement programs from age discrimination claims that is similar to the ERIP exemption. To facilitate a discussion of that idea, this memo provides an overview of the statutory exemption for early retirement incentive plans under ADEA

Topics: workplace flexibility, flexible work arrangements, phased retirement, age discrimination in employment act, early retirement, Labor and Employment Law, Labor Relations, Public Policy
Publisher: Scholarship @ GEORGETOWN LAW
Year: 2010
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