Early Retirement Programs
Employers who are planning to reduce their workforce may legally institute early retirement programs which offer incentives to certain groups of employees who wish to take the opportunity to retire early. These programs are permissible so long as the choice to accept or reject the early retirement offer is truly voluntary and the employee is in no worse a position than other similarly situated employees if he or she does not elect the early retirement option. Employees must be given adequate time (a minimum of 45 days) and opportunity to become informed as to the advantages and disadvantages of accepting the early retirement offer and to consult with legal counsel.
Incentives often include benefits such as 100 percent vesting in the employer’s retirement plan, cash payments based upon years of service, and continued group health insurance coverage. Because of complex issues relating to these programs, such as coverage of the program under the Employee Retirement Income Security Act and the danger of inadvertently providing greater benefits to the younger members of the targeted group, an early retirement program should be undertaken only with the advice of legal counsel.
Forced or Coerced Into Early Retirement?
Be sure to speak with a qualified Minnesota employment attorney before accepting any retirement plans.