Police officers and firefighters whose disability pensions were slashed because they started their careers at 31 or older will receive $250 million in a record age discrimination lawsuit settlement, California's main public employees retirement system announced Thursday.
The settlement of the suit by the federal Equal Employment Opportunity Commission ends an eight-year dispute initiated by a police officer in the San Francisco suburb of Fremont, which eventually became a class-action suit on behalf of hundreds of officers and firefighters.
The case, which went to the U.S. Supreme Court, alleged that officers and firefighters were unfairly given reduced disability pensions if they started their careers after 30 -- as prescribed under a 1980 state law. The agreement effectively kills the law and says that all employees must be paid under the same formula if they are injured while performing their duties as police, firefighters, prison guards or other public safety officers.
Los Angeles and some other public safety agencies were not parties to the lawsuit, which only involved cities whose disability retirement funds are administered by the California Public Employees Retirement System. The agreement pays $50 million in back benefits to 1,700 public safety officers who retired with job-related disabilities under the disputed law between 1992 and 2001. The same group is expected to accrue an additional $200 million in future benefits.
Until 1980, public safety officers sidelined by a job injury were eligible for an Industrial Disability Retirement equal to 50% of their salary. But the state lifted the age limit of 30 that had been in force for starting public safety jobs, at the same time implementing a formula that reduced disability retirement benefits for officers hired at 31 or older. Benefits were cut under the formula by about 2% for each year over the age of 30.
In some cases, disabled officers were living on as little as 12% of their former salaries, when they retired with an injury.
"I'm glad it's changed," said former Fremont Officer Ron Arnett, the lead plaintiff in the suit. "It shouldn't have taken 11 1/2 years."
The settlement, approved by U.S. District Judge Charles Breyer in San Francisco, frees the nation's largest retirement fund from the age-based benefit scheme. CalPERS viewed the age formula as inequitable and supported several unsuccessful efforts to repeal the law.
"This expedites a long-delayed benefit," said Robert Carlson, CalPERS acting president.
The disparity in disability retirements took effect Jan. 1, 1980, the same day the state abolished a law that required new police officers and firefighters to be 30 or younger.
California was one of many states forced to repeal the age limit for officers to comply with the Age Discrimination in Employment Act of 1967.
"It is certainly an irony that they replaced one form of age discrimination with another," said David F. Offen-Brown, an EEOC lawyer.
At the time the bill was debated, the impact of the age-based formula was well known. "This discriminates against the older person," said a 1979 analysis by the California Highway Patrol. "They face the same risks as the younger member, hurt and bleed just as much, face a harder time rehabilitating into other jobs, but under this bill, would also be penalized by receiving a lower retirement."
Legislators justified the pension limits by suggesting that older hires were more liable to be injured and also more likely to feign injuries to curtail their careers with large benefits.
A chart by the chief legislative analyst showed that if forced to retire because of injury, a safety officer hired at 30 would receive 50% of his salary, while a similarly situated officer hired at 40 would receive 30%, and an officer hired at 50 would get 10%.
Cerritos employment lawyer Steven R. Pingle said he began seeing angry officers in the early 1990s.
"It hit me as a mean-spirited attempt in the state Legislature 20 years ago to cut pension costs on the backs of older public safety officers, and it stunk," said Pingle, who represented plaintiffs in the suit.
The law "didn't say older workers are toast," Pingle said. But in the Legislature, "people were talking about the fact that this bill will discriminate."
Arnett said he started his career at 24 with the Berkeley Police Department. He later joined the neighboring Oakland force and in 1987, when he was 43, became a patrol officer in Fremont.
As part of its fitness policy, the department allowed officers to work out at a local gym while on duty.
Arnett was doing sit-ups when he hurt his back in 1992. By the time he got back to the station, he could barely get out of his patrol car.
"I've never been back in a uniform since," said Arnett, 58, who sells residential real estate in Fremont and who fought the retirement that his superiors forced on him.