Baltimore County will begin phasing in age-neutral pension contribution rates July 1 as a partial settlement of a federal age-discrimination lawsuit brought by the Equal Employment Opportunity Commission.
The lawsuit, filed in 2007, challenged the county’s practice of requiring older employees to contribute more to their pension plans than younger colleagues who’ve worked for the county for the same length of time in violation of the Age Discrimination in Employment Act.
Although the county changed its policy July 1, 2007 so that new hires would contribute to their pensions at a flat rate regardless of their age at the time they were hired, the contribution rates for employees hired before that date continued to be age-based, according to the consent decree signed last week.
Under the decree, which resolves the EEOC’s claims for injunctive relief, Baltimore County and six unions representing county employees are enjoined from requiring employees who are at least 40 years old to contribute to their pensions at higher rates than younger employees due to their age.
The decree establishes specific contribution rates that vary by employee title and classification, some of which will be phased in over the next three years.
For example, certain employees who are members of the Baltimore County Federation of Public Health Nurses and who were hired before July 1, 2007 will contribute 6.25 percent of their base pay to their pension starting July 1, a rate that will increase to 6.75 percent next year and 7.25 percent in 2018.
The consent decree does not address the EEOC’s claims for monetary relief, which will be addressed by the district court in later proceedings. The agency is seeking retroactive damages for employees harmed by the age-based pension policy as well as prospective damages for employees who may be harmed by the phasing-in of age-neutral rates.
“Baltimore County very much appreciates the wisdom of [U.S. District] Judge Richard Bennett in approving this settlement — the terms of which were brought to the court by Baltimore County,” said Ellen Kobler, a county spokeswoman. “We do not believe any employee was harmed and therefore do not believe any additional monetary relief is warranted. It is always important to remember, when discussing this case, that every single contract in question was arrived at through collective bargaining with all six of our employee bargaining units.”
The 4th U.S. Circuit Court of Appeals in 2014 upheld a 2012 ruling by Bennett that the county’s former pension plan was “facially discriminatory” in violation of the ADEA.
Because all county employees are eligible to retire with a full pension after 20 years of service, an employee hired at age 45 would be eligible at age 65, whereas a 25-year-old new hire would be eligible at 45. But under the county’s previous plan — which provided for contribution rates tied to age — the younger employee would contribute a smaller percentage of his or her salary to the plan than the older employee, despite receiving the same benefits, the 4th Circuit held.
The appellate court ordered the case remanded to the district court to consider damages owed to older employees.
“We brought this lawsuit because older workers had to pay a larger percentage of their salary to the pension plan to receive the same pension benefits as younger workers. That’s age discrimination, plain and simple, as both the Fourth Circuit and district court found,” Debra M. Lawrence, EEOC regional attorney, said in a statement. “We are pleased that county workers will no longer be penalized in pension contributions based on age. We look forward to the final resolution of this lawsuit and getting the older workers the monetary relief they deserve.”
The case is U.S. Equal Employment Opportunity Commission v. Baltimore County, et al., 1:07-cv-02500-RDB.
By: Lauren Kirkwood Daily Record Legal Affairs Writer