A recent appellate decision should put employers on notice that pension plans distinguishing between employees expressly based on age – even if economically reasonable or lacking in ill motive – could be deemed age-discriminatory and unlawful. In EEOC v. Baltimore County, the United States Court of Appeals for the Fourth Circuit held that Baltimore County’s pension plan violated the Age Discrimination in Employment Act (‘‘ADEA’’) because it required older employees to contribute a greater percentage of their salary than similarly situated younger employees. In light of the ruling, employers should proceed with caution in distinguishing plan participants on the basis of age – something that many plans do – to make sure that the age-based distinctions would still be considered lawful in light of Baltimore County.
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