Opinion ID: 503763
Heading Depth: 2
Heading Rank: 2

Heading: The MEIT Plan

Text: 13 Adding to its claim on the R16-73 plan, the EEOC amended its complaint April 28, 1986, asserting that Mt. Lebanon's termination of benefits to employees age sixty-two through sixty-eight under the 1984 MEIT plan violated the ADEA. Mt. Lebanon contended, however, that the MEIT plan was exempt from ADEA coverage because it was a bona fide employee benefit plan and not a subterfuge to evade the purposes of the ADEA. See 29 U.S.C. Sec. 623(f)(2). 14 Under the MEIT plan, which is presently in effect, 2 Mt. Lebanon no longer terminates benefits upon eligibility for normal retirement. Instead, it discontinues benefits based on a schedule providing: (1) payment until age sixty-five or normal retirement, whichever occurs first, if the disability occurred before age sixty-two; or (2) payment until age seventy, based on a sliding scale for individuals between ages sixty-two and sixty-nine. 3 15 The EEOC alleged that Mt. Lebanon's MEIT plan violated the ADEA because: (1) it did not provide benefits until age sixty-five for those disabled before age sixty; (2) it failed to provide benefits for five years for those disabled between age sixty and sixty-five; (3) it failed to provide benefits until age seventy for individuals disabled between the ages of sixty-six and sixtyeight; and (4) Mt. Lebanon had not established that this lower level of benefits for older employees was supported by sufficient age-related cost considerations. See 29 C.F.R. Sec. 860.120(f)(iii) (1982). Accordingly, the EEOC contended that the MEIT plan was a subterfuge to evade the purposes of the ADEA and not exempt under Sec. 623(f)(2). Mt. Lebanon, however, maintained that pursuant to Sec. 860.120(f)(iii), it had demonstrated sufficient age-related cost considerations to establish that its plan was not a subterfuge. Specifically, it relied on a schedule prepared by its insurer, which concluded that as a general rule the cost of providing disability benefits increases with an employee's age. See App. at 43. 16 The district court granted summary judgment in favor of Mt. Lebanon, holding that the city had disproved subterfuge by establishing an economic or business purpose or valid reason for the challenged terms even though every detail of the cost-justification regulations is not met. E.E.O.C. v. Mt. Lebanon, 651 F.Supp. at 1263.