The U.S. Equal Employment Opportunity Commission



WASHINGTON - In a move to intensify and upgrade analysis of possible age bias ramifications of increasingly popular employer conversions to cash-balance pension plans, U.S. Equal Employment Opportunity Commission (EEOC) Chairwoman Ida L. Castro today announced the creation of a national EEOC team of experts to focus on the legality of the plans to older workers.

"Whether or not cash-balance pension plans discriminate against employees covered by the Age Discrimination in Employment Act (ADEA) is a question that I am determined to explore fully," said Ms. Castro. "The complexity of the issue, which partly stems from the variety of ways these pension plans evolve and are formulated, necessitates our drawing upon the best expertise within EEOC to make determinations about their compliance with provisions of the ADEA." She continued: "This approach will also enhance our ability to effectively collaborate with agencies such as the Internal Revenue Service and the Department of Labor on these important issues."

According to Ms. Castro, the composition of the team will be drawn from a broad spectrum of internal experts, and stakeholders when necessary. Investigative, legal, and actuarial fields will be among those tapped to analyze the effects of the pension plans on more veteran employees. "The Commission has had a great deal of success recently in approaching difficult, broad issues, and instituting reforms, in a comprehensive and inclusive manner," she said. "The breadth and complicated nature of this issue demands such a course to ensure that we arrive at a correct application of the law."

The crux of the debate is whether older workers those closer to retirement are unlawfully discriminated against when employers convert from traditional pension plans to cash-balance pension plans, which may reduce the expected retirement benefits of older employees while increasing the benefits allotted to younger workers.

Over the past few weeks, Ms. Castro has heard the concerns of lawmakers on both sides of the aisle and various stakeholders regarding some employer conversions to cash-balance pension plans. She also continues to coordinate with other executive branch agencies whose enforcement jurisdictions may be affected by the pension plan, such as the Departments of the Treasury, Labor, and the Internal Revenue Service. The feedback being gathered from employer, employee, labor, and civil rights groups will be incorporated into the analyses of the review panel, Ms. Castro said.

In addition to enforcing the ADEA, which protects workers age 40 and older from employment discrimination, the EEOC enforces other federal statutes which prohibit employment discrimination based on race, color, sex, religion, national origin, and disability in the private sector and state, local, and federal government.

This page was last modified on September 20, 1999.

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