Supreme Court Rules in Ky Age Discrimination Case

This from the Education Law Blog:

The U.S. Supreme Court ruled last month in a decision under the Age Discrimination in Employment Act of 1967. The court ruled against a Kentucky worker by holding that certain disparities in that state's public-employee retirement system do not violate the federal law.

In Kentucky Retirement Systems v. Equal Employment Opportunity Commission (No. 06-1037), the justices ruled 5-4 that the state's retirement system does not discriminate based on age against certain workers who become disabled after becoming eligible for retirement.

The case arose over differences in the way the Kentucky retirement system compensates workers who retire for reasons of disability and those who retire because they have served the requisite length of time. In that state, public-sector workers can retire after 20 years of service or at age 55 with five years of employment.

A sheriff’s department employee who was 61 when he sought disability retirement was told he could only retire under the state’s regular retirement plan, which the employee contended resulted in a lesser benefit level. The federal Equal Employment Opportunity Commission sued the state on behalf of the worker, arguing that Kentucky’s plan provides lesser benefits to certain older workers who must stop working because of disability, and thus discriminates against them based on age. (I blogged about oral arguments in the case here.)

But in his opinion for the court, Justice Breyer said the disparities in Kentucky's
system hinged more on a beneficiary's pension status than his age.

"Kentucky's system does not rely on any of the sorts of stereotypical assumptions that the ADEA sought to eradicate," Justice Breyer said. "It does not rest on any stereotype about the work capacity of 'older' workers relative to 'younger' workers."

In an unusual lineup, Justice Breyer's opinion was joined by Chief Justice John G. Roberts Jr. and Justices John Paul Stevens, Souter, and Thomas. Justice Anthony M. Kennedy wrote a dissent joined by Justices Antonin Scalia, Ruth Bader Ginsburg, and Samuel A. Alito Jr.

Groups such as the NSBA and the National Council on Teacher Retirement had filed
friend-of-the-court briefs expressing concern about the possible effects of the case on public-employee retirement plans, which cover teachers and other school workers.

The NSBA, based in Alexandria, Va., expressed worry in its brief about the effect of the case on school districts’ early-retirement-incentive plans for teachers. The teacher-retirement council, a Sacramento, Calif.-based group representing 77 state and local teacher-pension plans, joined a brief on Kentucky’s side that had argued the EEOC’s position could lead to instability for public-retirement funds and would require changes to plans in “virtually every state.”

Calls for a Special Session

The Kentucky Chamber of Commerce, Kentucky League of Cities and the Prichard Committee for Academic Excellence is urging Gov. Steve Beshear to call a special legislative session within 30 days to overhaul the state's retirement programs.

This from PolWatchers.

A shameful end

This from C-J:

The Governor and every Kentucky legislator, mayor, public school teacher and government employee knows how critical solving the pension problem is. The
current system is unsustainable and has a $26.6 billion unfunded liability.

Taxpayers will have to pay that debt -- which increases by hundreds of millions
each year.

No issue was more important. All parties said a solution would be found. Then a little before midnight on the last night, the House balked. Ironically, the proposal it rejected was almost exactly what it had wanted. The Senate had given in on the last two contentious issues, including its determination to divert some retirement money to a 401(k)-type plan.

The Senate did, however, want to keep the possibility of these "defined contribution" plans open for the future, but, sadly, that wasn't acceptable to some interest groups friendly with the Democratic-controlled House. Brent McKim of the Jefferson County Teachers Association, for example, calls that provision "a Trojan horse." Never mind that 401(k)s are a reality for most private sector employees.

So the hope for solving this problem died. Last year, the House also killed a pension bill. Others can share some blame for this year's failure. The Governor didn't push the pension bill effectively. Senate President David Williams, in a casual remark weeks ago, led House members to believe they need not seriously negotiate, because the Senate's fallback position would be to accept the House plan. Finally, the legislature's dysfunctional way of doing business hurt, too:

Members save too many big decisions for the last minute, leaving little time even to read last-minute versions of far-reaching proposals.

Still, the House deserves the most blame. In the aftermath of this debacle, Sen. Williams said, "It may be that with the current makeup of the House, we can't do pension reform."

That's a sobering thought. Taxpayers have every right to expect better.

And more from Mark Hebert.

Blame Game in Frankfort

House Speaker Pro-Tem Larry Clark called it the worst final day of a session he's seen during his more than 20 years in Frankfort. Clark says he's "embarrassed to be a part of a leadership" and embarrassed to be a part of what happened last night in Frankfort...

David Williams blamed the KEA and JCTA for killing the pension bill, saying the teachers' lobbyists scared enough house members about details of the agreement reached between House and Senate leaders...

Pension Issue Unresolved

The Courier-Journal's Tom Loftus reports that at midday today, on what is intended to be the final day for passing bills in the 2007 legislative session, top leaders in the House and Senate remained divided on a plan to bail out state retirement systems.

Senate President David Williams, R-Burkesville, said the Senate still wants approval of more than $800 million in bonds to cover financial problems in the state employee and teacher pension plans, as well as limits on benefits for future state employees.

But House Speaker Jody Richards, D-Bowling Green, said the limiting of benefits for future state workers needs to be studied more.