Cairo Association of Teachers - Newsletter

CAT Tracks for August 23, 2006 BELATED RETIREMENT BONUS

From the St. Paul Pioneer Press...

Early-retirement incentives decreased as workers got older

BY MEGAN BOLDT
Pioneer Press

The Stillwater school district has agreed to pay $1.1 million to settle an age-discrimination lawsuit brought by the U.S. Equal Employment Opportunity Commission, which claimed the district's early-retirement program discriminated against older workers.

This settlement ends the last of 12 lawsuits the commission filed against Minnesota school districts over early-retirement incentive plans that reduced benefit payments the longer employees waited to retire.

More than 200 retirees in the districts that were sued � including Bloomington, Lakeville and Rosemount-Apple Valley-Eagan � are to receive a total of $2.6 million in back pay and interest, according to the settlements.

In Stillwater, 57 former employees will receive $4,000 to $100,000 each, depending on when and at what age they retired, said Laurie Vasichek, the commission's lead trial attorney in Minneapolis. All retired between 1998 and 2001, when they were at least 55.

"The teachers and school employees were punished because they wanted to keep working. It made no sense," Vasichek said. "We appreciate the Stillwater school district looked at its practices and resolved the suit promptly."

The EEOC sued the Stillwater district in December.

Cathy Moen, the school district's director of administrative services, said Stillwater ended its early-retirement program in 2001, when the program was removed from employee contracts. She said the settlement would be a hit to this year's budget, although the district plans to cover the cost by levying taxpayers for it.

"I can't say we're necessarily happy," she said. "That's a lot of money we have to come up with."

Early-retirement incentive programs were created in the mid-1980s when state lawmakers agreed to give districts money to use toward them. But the state only funded the program for a few years, officials from the Minnesota School Boards Association said, and the EEOC informed school districts and employee unions that the plans were illegal after the state funding stopped.

Spokeswoman Shelley Tougas said the school board association is not aware of any contract that still includes the incentives.

In addition to the financial settlement, Stillwater is required to post a notice of the settlement and report all revisions to its early-retirement incentive plans to the EEOC. The district also is prohibited from administering any retirement incentive plan that reduces benefits based upon the retiree's age.