Compliance October 22, 2012

Court Finds Baltimore County Pension Plan Discriminatory

October 22, 2012 (PLANSPONSOR.com) – A federal judge found the Baltimore County Employee Retirement System (ERS) violates the Age Discrimination in Employment Act (ADEA).
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The U.S. District Court for the District of Maryland found the plan to be “facially discriminatory” because the plan explains the different contribution rates required by different employees by age rather than pension status. The court concluded there are no non-age-related financial considerations that justify the disparity in contribution rates between older and younger workers.  

Originally filed by the Equal Employment Opportunity Commission (EEOC) in 2007, the lawsuit claimed the pension plan discriminated against older participants by requiring them to pay more toward their retirement savings than younger workers. Prior to the lawsuit, employees’ pension contributions were calculated based on how long they would work for the county before they turn 60. Younger county employees were required to contribute about 4% to their pension systems and older employees 6% or more.  

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The district court previously concluded that Baltimore County was motivated by a permissible principle—the time value of money—rather than the age of new hires (see “Court Upholds Higher Pension Contribution Requirement for Older Workers”). The 4th U.S. Circuit Court of Appeals vacated that decision when the EEOC appealed.  

The next phase of the litigation will determine damages. The EEOC has asked that the affected participants be reimbursed for amounts wrongfully withheld from their paychecks. The county has since changed its pension system so all employees pay a flat contribution rate. 

The district court’s opinion is here.  

Products October 22, 2012

T. Rowe Price Offers Plan Sponsor Fiduciary Training

October 22, 2012 (PLANSPONSOR.com) – T. Rowe Price launched FiduciarySource, an online program designed to help plan sponsors better understand and fulfill their fiduciary obligations.
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The six training modules include:

  • The Big Picture: What fiduciaries must do, not do and what happens when they make a mistake;
  • The Practical Reality of Being a Fiduciary: How fiduciaries delegate authority and responsibilities;
  • Service Providers: What they do, hiring them and reviewing their performance;
  • Investing the Money: The use of investment policy statements, investment committees and investment managers;
  • Day-to-Day Operations: What must be done in plan operations and who is responsible; and
  • Communicating Financial Information to Workers: Whether sponsors are giving participants education, advice, or neither. 

The online tool offers training that accommodates plan sponsors’ learning preferences and time constraints, said Michael Skinner, head of client experience and research for Retirement Plan Services (RPS). The program tracks progress and offers a certificate of completion at the end of training, which could be important in the event of a plan audit, he said.

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FiduciarySource includes a series of seven training videos, corresponding print guides and an online quiz to test sponsor knowledge. Sponsors can use a computer or tablet device.

The program was developed by T. Rowe Price in collaboration with Bradford P. Campbell, former Assistant Secretary of Labor for Employee Benefits with the U.S. Department of Labor’s Employee Benefits Security Administration. Campbell also narrates and is featured in many of the training videos.

For more information, visit www.troweprice.com. 

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