PHOENIX—An Arizona school district that was charged by the Equal Employment Opportunity Commission with having age discriminatory retirement plans has agreed to a $148,092 settlement.

According to the EEOC, Tempe Elementary School District No. 3 used an early retirement incentive plan and a normal retirement plan that granted greater economic benefits to younger employees based solely on their age in violation of the Age Discrimination in Employment Act.

School Superintendent Chris Bush said Friday that its attorney-approved retirement policy had been in place for several decades with no complaint. But the agency said that as a result of its investigation and litigation, the school district has revised its retirement plans to comply with the ADEA.

The school district also has agreed to pay workers who retired after April 3, 2008, the difference between what they received and what they should have been paid for those leave payouts had there been no unlawful discrimination. The settlement affects 49 retirees, according to the EEOC.

The consent decree approved by a federal court in Phoenix also requires anti-discrimination training and a review of the school district's policies and practices, according to the EEOC.

“Early retirement incentive plans and normal retirement plans which are facially discriminatory need to be changed,” EEOC Regional Attorney Mary Jo O'Neill said in a statement. “Discrimination on the basis of age is simply illegal....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.”

%%BREAK%%

Ms. Bush said the school district had a policy for several decades under which school employees who retired at age 55 received 52% of their salary, a percentage that declined as they got older. The policy was reviewed by attorneys, she said.

“No employees ever brought it to our attention, nobody every argued with it. Everybody retired and took their money and went on their way,” she said.

“In 2010, the EEOC determined that the policy itself would possibly be discriminatory and launched an investigation, and the minute the EEOC made us aware of it, we changed the policy, and so everybody who's retired is paid at 52% of their daily rate of payment,” she said.