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Full Version: defined benefit plan with different penalties for early retirement between blue collar and white collar workers.
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bertie 55
Company is part of a corporation and our defined benefit plan allows for early retirement at age 55 but if you are a blue collar worker (non-union) then you suffer a 6% penalty per year of early retirement while the white collar workers only suffer a 3% penalty per year so the difference of course could be a loss of 60% for the laborers while only 30 for the white collar which by the way are mostly paid hourly also and should not pass the test for being exempt employee. Also, my company, which was a publisher and printer with a bindery started downsizing 2 years ago, now most of the people who lost their jobs of course were blue collar, some being there 40 years and they are still too young to take their retirement at 65 so they lose a lot of money. I do not understand how a company can discriminate like this, also, I have been a white collar worker there for the past 3 years only because I was hurt in an accident (broken back) and could no longer do my job as a laborer. I have worked there 18 years and they split my pension. I am totally vested in the blue collar pension but am only 30% in the white collar pension. How, in the world can a company justify that just because I moved to an office to work at the same place. Many of the people that lost their jobs are in their late 40's, 50's. and have worked there since high school, many are disabled from all of the heavy labor they have done over the years. Shouldn't a defined benefit plan have the same penalty rule for all?
AndyH
Was the blue collar plan subject to collective bargaining? If so, that is what was bargained for. You get what your unit bargained for. Period.

If not, the answer to your question is not readily apparent, since there are rules that make such discrepancies difficult to justify.
pax
Since the original post touched on so many different issues, it is difficult to respond, except to say:
- there is ambiguity in original post as whether there is more than one plan;
- there is no requirement that all employees have exactly the same benefits, whether in one plan or more;
- the plan provisions are what they are, whether or not they seem "fair" to everyone;
- I very much doubt you are only "...30% in the white collar pension..." if you are "...totally vested in the blue collar pension...". However, it is also possible that you are using the term "vested" in a manner other than its usual meaning.
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