Governmental employer wants to provide for early retirement subsidy in its own qualified pension to subsidize reduced benefits on account of early retirement under state public retirement system. Governmental employer is considering this option to accomodate early retirement needs of employees while staying away from ADEA issues by stopping benefits at a certain age. Anyone considered whether you can have the subsidy set out in a qualified plan separate and distinct from the general pension? I cannot seem to find any discussion of this one way or the other.

Several options are available that should not run afoul of ADEA, or more importantly state statute. Purchase of annuity for participant (variable or fixed) is usually permissible, if the proper steps are taken by the governing board.