Ohio Pub. Employees Retirement System v. Betts

PETITIONER: Ohio Pub. Employees Retirement System
RESPONDENT: Betts
LOCATION: Sable Communications of California

DOCKET NO.: 88-389
DECIDED BY: Rehnquist Court (1988-1990)
LOWER COURT: United States Court of Appeals for the Sixth Circuit

CITATION: 492 US 158 (1989)
ARGUED: Mar 28, 1989
DECIDED: Jun 23, 1989

ADVOCATES:
Andrew Ian Sutter -
Andrew Ian Sutter - for appellant
Christopher J. Wright - for the Equal Employment Opportunity Commission as amicus curiae supporting the appellee, by special leave of Court
Robert F. Laufman - for appellee

Facts of the case

Question

Media for Ohio Pub. Employees Retirement System v. Betts

Audio Transcription for Oral Argument - March 28, 1989 in Ohio Pub. Employees Retirement System v. Betts

William H. Rehnquist:

We'll hear argument next in No. 88-389, Public Employees Retirement System of Ohio v. June Betts.

Mr. Sutter, you may proceed whenever you're ready.

Andrew Ian Sutter:

Thank you, Mr. Chief Justice, and may it please the Court:

This case presents the following issue: Must age-based distinctions in benefits offered through a bona fide employee benefit plan be justified by age-related cost considerations?

The Sixth Circuit answered that question in the affirmative.

The Public Employees Retirement System of Ohio, however, disputes that holding and believes that an age-related cost justification is inconsistent with the plain language of the Age Discrimination and Employment Act and, moreover, is inconsistent with the purposes of the ADEA, and in particular, Section 4(f)(2) of the act.

The facts are as follows.

The Public Employees Retirement System of Ohio, which I will refer to as PERS, was created by the Ohio General Assembly in 1933.

It provides retirement benefits to Ohio public employee; on the municipal, county and state level.

There are two types of retirement benefits available: age and service retirements benefits and disability retirement benefits.

There are three ways to qualify for age and service retirement benefits.

A member of PERS may be... must have at least five years of service credit, have attained the age of 60; or must have at least 25 years of service credit and be at least 55 years of age; or must have 30 years of service credit, irrespective of age.

In order to qualify for disability retirement benefits, a member of PERS must have at least five years of service credit, have not attained the age of 60, and be, or presume to be, permanently disabled.

June Betts... I'm sorry.

The actuarial assumptions that underlie both the disability retirement benefits and the age and service retirement benefits are intertwined.

And all benefits, whether they be age and service or disability retirement benefits, are derived from a common fund.

June Betts, the appellee, was hired by the Hamilton County Board of Mental Retardation and Developmental Disabilities at the age of 55.

At the age of 61 she became disabled because of health.

She submitted applications both for disability retirement benefits and age and service retirement benefits to PERS.

She requested that her age and service retirement application not be processed unless her disability retirement application could not be processed.

June Betts was more interested in the disability retirement benefits because they would have afforded her a higher monthly pension.

Because Ohio law contains an age 6O cutoff for eligibility to apply for disability retirement benefits, PERS could not process her disability retirement application.

They did, however, process and approve her age and service application.

She is currently receiving a monthly pension, as well as full health care.

June Betts initiated suit claiming that the age 60 cutoff under Ohio law for eligibility to apply for disability retirement benefits constituted a violation of the Age Discrimination in Employment Act.

PERS defended on the basis that its plan was protected under Section 4(f)(2) of the Act, which provides that it will not be illegal for an employer to observe the terms of any bona fide employee benefit plan, such as a retirement, pension or insurance plan, which is not a subterfuge to evade the purposes of the Act, provided no such plan permits or requires involuntary retirement because of age.

The District Court granted June Betts' motion for summary judgment on two bases.

First, the court held that PERS was not the type of plan contemplated under 4(f)(2) because the age 60 cutoff could not be justified by age-related cost considerations.

Secondly, the District Court found that the unavailability of disability retirement benefits to June Betts was the equivalent of constructive discharge and involuntary retirement because of age.

A divided panel of the Sixth Circuit affirmed on the basis that the age 60 cutoff under PERS could not be justified by an age-related cost consideration.