Does a pension plan that treats workers differently based on their pension status automatically result in age discrimination?

Not necessarily. In Kentucky Retirement System v. EEOC (SCt 2008) 91 EPD ¶43,230, the US Supreme Court upheld, five-to-four, the state’s disability retirement plan. Under the plan, hazardous position workers, such as police officers, not yet eligible for retirement, who become disabled, are provided credit for additional years of service to the extent necessary to meet normal retirement criteria. By contrast, workers who are eligible for normal retirement benefits, but continue to work, do not qualify for disability retirement benefits if they become disabled. Workers become eligible for retirement at the age of 55 or after 20 years of employment. The retirement benefit is calculated by multiplying years of service times 2.5 percent times a worker's final preretirement pay. Thus, workers who become disabled prior to qualifying for retirement based on age or years of service are sometimes treated more generously than those who become disabled after they could have retired based on age.

The High Court rejected the contention that a plan which lawfully makes age in part a condition of pension eligibility and treats workers differently based on their pension status automatically discriminates because of age. According to the Court, the disparate treatment was not actually motivated by age but instead based on the analytically distinct concept of pension status.