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Cash Balance Plan Not Age Discriminatory

Posted by Frank Steinberg | Jan 31, 2007 | 0 Comments

Earlier this month we reported on a big win the the US Supreme Court for IBM, whose cash balance retirement plan was challenged by older workers as age discriminatory.  The defect, the plaintiffs argued, was that the plan treated younger workers more favorably.  The Supreme Court ruling does not settle the issue on a national level because it merely refused to hear an appeal of a lower court decision of the case.

Now the same issue has come to New Jersey.  US District Judge Stanley Chesler has ruled that Dun & Bradstreet's cash balance plan does not unlawfully discriminate against older workers.  Judge Chesler ruled that "the principle of compound interest and the passage of time produce the age differences that plaintiff complains of, but these are things that are correlated with age; they are not the effects of age discrimination."

There are cases from other jurisdictions that take an opposite view, so this is an issue that the Supreme Court will probably end up reviewing. 

About the Author

Frank Steinberg

Frank is the founder and principal of Steinberg Law, LLC. A Jersey boy born and bred, he focuses on employment litigation and counseling, business litigation,  and aviation law. Following law school and a clerkship in the federal district court Frank spent his early career with large litigation ...

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