OAG 84-10.

Case DateDecember 31, 1984
CourtOregon
Oregon Attorney General Opinions 1984. OAG 84-10. 330OPINION NO. 84-10[44 Or. Op. Atty. Gen. 330]No. 8160December 31, 1984The Honorable Grattan KeransSpeaker of the House of RepresentativesQUESTION PRESENTEDDoes the payment by the Public Employes Retirement System (PERS) of annuity payments at a lower rate to women who retired from public service before July 1, 1978, than to women who retired on or after July 1, 1978, deny the first class of women rights under the Oregon or United States Constitution?ANSWER GIVENNo. DISCUSSIONI. FactsBefore addressing the issues, a brief background statement is helpful. PERS used sex-differentiated actuarial tables from the passage of the present Oregon Public Employes Retirement Act, ORS chapter 237, in 1946 until July 1, 1978, when the Public Employes Retirement Board entered into a consent judgment terminating the practice. PERS provides its members with monthly retirement allowances made up of two components:
(1) an "employer life pension" totally financed by the individual's public employer; and
(2) an "employe's refund annuity" totally financed by employe contributions or contributions made on behalf of the employe through a collective bargaining agreement or other formal employment policy "pick-up" arrangement.
The employer life pension is paid for the duration of the employe member's life and even before July 1, 1978, did not differ as to the sex of the member. If the member lives a long time, the pension costs the public employer more; if a member dies early, it costs the public employer less. The employe's refund annuity, financed solely by employe contributions, was paid out in monthly amounts that would not exceed on an actuarial basis the amount of funds available in the employe member's account of individual contribution. PERS women members as a group live approximately four and331 one-half years longer than their male counterparts as a group. Although retirement trusts are created to provide monthly benefits for a retiree's life, no board of trustees can know at the time of an employe member's retirement how long that individual will live, even though the actuarial life expectancy of the male and female groups are known. Thus, before July 1, 1978, PERS calculated refund annuity retirement benefits for female retirees at a lower monthly rate than it did benefits for male retirees on the actuarial assumption that a total lifetime payout for male and female members would be identical, assuming that the members of each group live out their normal life expectancies. In 1975, several women employed by the State of Oregon brought an action under Title VII of the Civil Rights Act of 1964, 42 USC §§ 2000e et seq.,(fn1) in the United States District Court for the District of Oregon, challenging PERS' use of sex-based actuarial tables. Henderson v. State of Oregon, 405 F Supp 1271 (D Or 1975). While that litigation was pending, on April 25, 1978, the United States Supreme Court held in Los Angeles Dept. of W. & P. v. Manhart, 435 US 702 (1978), that the use of sex-differentiated actuarial tables in calculating pension benefits violated Title VII's prohibition of discrimination in compensation based on sex. The Court, however, granted the Manhart plaintiffs only prospective relief. Retroactive relief was deemed inappropriate because of the substantial unanticipated costs of such relief and because the administrators of the pension plan at issue had no way of knowing before the Court's decision that the practice was unlawful. 435 US at 720-722. The Court explained:
"The Albemarle [Paper Company v. Moody, 422 US 405 (1975)](fn2) presumption in favor of retroactive liability can seldom be overcome, but it does not make meaningless the district
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