The Cash Balance Controversy Revisited: Age Discrimination and Fidelity to Statutory Text
31 Pages Posted: 12 Apr 2001
In this article, Professor Zelinsky replies to those who have criticized his earlier analysis of the controversy surrounding cash balance pension plans. In particular, Professor Zelinsky defends his interpretation of the pension age discrimination statutes as barring most such plans and rebuts those who, relying heavily on legislative intent and history, contend that cash balance plans do not run afoul of the pension statutes barring age discrimination. In this setting, any finding of age discrimination must necessarily be fact- and plan-specific; nevertheless, if we take the statutes seriously, it is reasonable to conclude that many, likely most, cash balance plans flunk the statutory prohibitions against age-based declines in the rate of benefit accrual. Those concluding otherwise brush aside the literal terminology of the pension age discrimination statutes to reach results which are compelling as a matter of policy, but which, as a matter of statutory interpretation, do not constitute a compelling construction of the statutes as they exist today. At its most basic, our system of tax and pension laws cannot function without fidelity towards statutory texts, fidelity which frequently entails the acceptance of outcomes with which the reader disagrees as a matter of policy. Ultimately, a system of statutory law requires us to take statutes seriously. And taking the pension age discrimination statutes seriously leads to the conclusion that many, likely most, cash balance plans violate such statutes.
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