Opinion ID: 400084
Heading Depth: 2
Heading Rank: 1

Heading: Home's Retirement Plan

Text: 3 Since 1948 Home has maintained a noncontributory retirement plan (the Plan) for its employees. Under the terms of the Plan that were in effect until December 31, 1973, the normal retirement age, i.e., the age at which an employee was allowed to retire and receive full pension benefits without actuarial reduction, was 65. The mandatory retirement age, i.e., the age at which an employee was required to retire, was also 65. The Plan also allowed employees to retire between the ages of 55 and 65 at reduced pensions. Home stated that during the period 1969 through 1972, a substantial number of Home employees had opted for early retirement with reduced pension benefits, and that the average age of such early retirees was under 62. 4 Effective January 1, 1974, Home amended its Plan to, inter alia, lower both the normal and the mandatory retirement ages from 65 to 62. The amount of full pension benefits, which accordingly became payable at age 62, was increased. The earliest age at which an employee could retire early with reduced benefits remained 55, and the percentages of accrued benefits payable to those who retired early were increased. 5 In December 1978, the United States Secretary of Labor, after receiving a complaint from a Home employee and attempting informal negotiations with Home, commenced the present action 1 for monetary and injunctive relief, contending that Home, 2 by lowering the mandatory retirement age from 65 to 62, had violated § 4(a)(1) of the ADEA. 3 Home contended (a) that in enforcing the lower mandatory retirement age it was simply observing the terms of a bona fide employee retirement plan and hence was acting lawfully under § 4(f)(2) of the Act, 4 and (b) that in lowering the mandatory age Home had acted in good faith reliance on, and in conformity with, interpretations of the ADEA by the Wage-Hour Administrator of the Department of Labor, and that its actions were therefore immunized by § 10 of the Portal-to-Portal Act, 29 U.S.C. § 259 (1976) (Portal Act). 5 The EEOC contended that Home's action was not protected by § 4(f)(2) of the ADEA because the action was mere subterfuge to evade compliance with the Act, and that the Portal Act defense was not available to Home because its action was not in conformity with the administrative rulings to which Home pointed. 6