Offering Subsidized Early Retirement for a Limited-time

[JRG]

A company is looking to reduce its workforce through voluntary retirements.  Their current pension plan offers early retirement benefits before age 65, with a 1/20th reduction in the NRB for each year a person retires before age 65.

Is there any problem with offering employees who are over age 60 that retire during a 90-day window (e.g., June-Aug 2017) that their retirement benefit will not be reduced?

Example - an employee age 61 could normally retire, but the NRB would be reduced 4/20ths.  If they were to retire between June-August this year they would receive their full benefit.

[My 2 cents]

Probably OK, so long as the eligible group passes coverage.  How else would an early retirement window work? 

[jpod]

This is quite common.  As long as it is open to everyone with no restrictions or conditions there shouldn't be any problem.  Pretty sure EEOC clarified long ago that the fact that the benefit declines with age, and eventually disappears at age 65, is not an ADEA problem.   

[david rigby]

Agree with prior replies.  As described in original post, this is a fairly common ER window.  Discrimination testing is needed on the front end, but (probably) not on the back end. 

However, there are communication and timing issues that can be important.  Many pension actuaries have experience that can be useful to the plan sponsor.