Tempe School District Settles EEOC Suit

May 25, 2012 (PLANSPONSOR.com) – Tempe Elementary School District No. 3 has settled an employment discrimination lawsuit filed by the U.S. Equal Employment Opportunity Commission (EEOC).

The district will pay $148,092 and other relief to 49 class members, all of whom retired after April 3, 2008. They will receive the difference between what they were paid for their leave payouts and what they should have been paid for those payouts had there been no unlawful discrimination. 

According to the EEOC’s suit, which was filed in the U.S. District Court for the District of Arizona,  the school district violated the Age Discrimination in Employment Act (ADEA) by utilizing an early retirement incentive plan and a normal retirement plan which granted greater economic benefits to younger employees based solely on their age (see “School District Charged with Age Bias over Early Retirement Plan”).

“Early retirement incentive plans and normal retirement plans which are facially discrimina­tory need to be changed,” said  EEOC Regional Attorney Mary Jo O’Neill.   “Discrimination on the basis of age is simply illegal.  People in their 60s should not be penalized merely because they want to continue working.  A retirement plan which states, for example, that employees 52 years old will receive a greater economic benefit than an employee 61 years old for retiring early is discriminatory on its face.” 

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As part of the settlement, the court decreed that the district will have to provide anti-discrimination training for all employees and review all policies to ensure a work environment free from age discrimination.  In addition, the court forbade the district from reinstating the unlawful policy or adopting policies that violate the ADEA

Jay Polansky 

Company Uses ‘Holistic’ Approach to Improve 401(k) Participation

May 25, 2012 (PLANSPONSOR.com) - Increasing 401(k) plan participation rates is high on many plan sponsors’ priority lists, but what are the most effective tactics?

For Leviton, a privately held manufacturer of electrical wiring equipment, the answer is holistic education, as well as auto and advice features. The company, which has 2,400 U.S. employees, boasts an 84% participation rate in its 401(k) plan.

Fran Ruderman, Leviton’s vice president of human resources, told PLANSPONSOR the company uses automatic enrollment, automatic increase and Advice Access—a tool from Bank of America Merrill Lynch that offers saving and investment advice based on an individual’s personal situation and life stage.

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Leviton adopted auto enrollment in 2007, Advice Access in 2009 and began auto increase at the beginning of this year.  The company’s 401(k) match starts at 3% with an automatic increase of 1% per year.

“The fact that auto enrollment and auto increase was available was great,” Ruderman said. “We’re a big proponent [of] employee education, information and accountability.”

According to Bank of America Merrill Lynch’s 401(k) Contribution Activities Scorecard, plan sponsors using auto enrollment, auto increase and Advice Access had a 76% participation rate on average in March 2012 and March 2011. Plans that did not use these services showed a 48% participation rate in March 2011 and a 50% rate the following year.

Kevin Crain, head of institutional retirement and benefit services for Bank of America Merrill Lynch, said he foresees an increase in plan sponsors implementing auto and advice tools together—generally with auto enrollment first, followed by auto increase and advice tools. “So I think that’s kind of the order we normally see … and then you’ve really got a complete picture,” he said.  

Leviton’s Advice Access numbers continue to climb, going from 53 employees enrolled as of January 2010 to 480 enrolled as of March 2012, Ruderman said.

The company started a health care wellness program in 2007, but Ruderman said company officials wanted to take things a step further by adding a retirement wellness component in 2008. They partnered with Bank of America Merrill Lynch for an education program that emphasized the importance of continuing 401(k) contributions during a period of economic uncertainty.

“We just continued on that campaign since then,” Ruderman said. “We’re just continuing on the whole aspect of driving holistic wellness.”

The company strives to give employees a healthier lifestyle by organizing weight loss contests, Zumba classes and even adding a tranquility room. The facility has also been measured so employees can track the distance they walk during their lunch break.  

In addition, Leviton has a program that allows employees to save on health premiums by exhibiting healthy behavior.

As for the future, Ruderman said the company is always happy to explore new retirement features. “I’d be happy to be a guinea pig,” she said. “Anything we can do to help an individual become a smarter saver and take accountability for their retirement future. We just want to keep educating.”

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