U.S. Supreme Court Rules Disability Benefit Formula That Credits Younger Workers With Additional Years Of Service Does Not Violate The ADEA Because Any Disparate Treatment Was Not 'Actually Motivated' By Age

On June 19, 2008, in Kentucky Retirement Systems, et al.

v. Equal Employment Opportunity Commission, No. 06-1037,

the U.S. Supreme Court addressed disability benefits provided

by a retirement plan (the "Plan") that qualified

hazardous duty personnel for pension eligibility based on 20

years of service or upon attaining age 55 and having

five years of service. For those who became disabled before

they were pension eligible, the Plan provided disability

retirement benefits that included imputing service to when the

disabled person would first become pension eligible. In a 5-4

decision, the Court concluded that the more generous treatment

afforded to individuals who become seriously disabled before

reaching retirement eligibility did not violate the Age

Discrimination in Employment Act ("ADEA") because

this treatment was not "actually motivated" by age.

Rather, any disparity is based solely on pension eligibility,

which is a concept "analytically distinct" from age,

even though pension eligibility may in part be based on

age.

Background and Lower Courts' Decision

Charles Lickteig, an employee in the Jefferson County,

Kentucky Sheriff's Department, was a participant in a plan

put in place by the State of Kentucky for state and county

workers who hold hazardous jobs, such as law enforcement

officers, firefighters and paramedics. As noted, the Plan

provides that an employee is eligible for a normal retirement

benefit after either 20 years of service, or 5 years of service

in the case of an employee who attains age 55. The Plan pays

benefits based on years of service times 2.5% of final

preretirement pay. The Plan also allows an employee who has

five years of service and becomes disabled to retire

immediately, and allows an employee to retire immediately,

regardless of years of service, if the employee becomes

disabled in the line of duty. A participant who becomes

disabled prior to becoming eligible for a normal retirement

benefit receives imputed years of service equal to the number

of years that the disabled employee would have had to continue

to work in order to become eligible for normal retirement, but

limited to no more than the number of years already worked.

Lickteig was eligible to retire when he reached age 55. He

continued to work, however, until he reached age 61, when he

became disabled after 18 years of service. Because Lickteig

became disabled after satisfying the Plan's eligibility

requirements for a normal retirement benefit, the...