834 F. 2d 299 - Brown v. New York State Teachers' Retirement System

Two retired women teachers and one current woman teacher with vested pension and annuity benefits appeal from a memorandum opinion and order of the United States District Court for the Southern District of New York, Charles S. Haight, Jr., Judge, pertaining to the use of sex-distinct mortality tables. Hannahs v. New York State Teachers' Retirement System, 656 F.Supp. 387 (S.D.N.Y.1987). Following Arizona Governing Committee for Tax Deferred Annuity and Deferred Compensation Plans v. Norris, 463 U.S. 1073, 103 S.Ct. 3492, 77 L.Ed.2d 1236 (1983) ("Norris "), the New York State Teachers' Retirement System developed sex-neutral mortality tables to compute benefits based on contributions or accruals made on and after August 1, 1983, the date Norris became final, but continued to use sex-distinct tables to compute benefits on contributions or accruals made on or before July 31, 1983. In the decision appealed from, Judge Haight held, first, that even though the use of sex-distinct tables for annuity purposes was a violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. Sec. 2000e et seq., under Los Angeles Department of Water and Power v. Manhart, 435 U.S. 702, 98 S.Ct. 1370, 55 L.Ed.2d 657 (1978), Norris did not apply retroactively to cover prejudgment contributions. Following Spirt v. Teachers Insurance and Annuity Association, 735 F.2d 23 (2d Cir.), cert. denied, 469 U.S. 881, 105 S.Ct. 247, 83 L.Ed.2d 185 (1984), Judge Haight said that "where a guaranteed payment may be identified, Norris precludes retroactive relief based on unisex tables which would impose a financial burden upon the plan," 656 F.Supp. at 390 (emphasis in original). He found that the annuity portion of the teacher's retirement allowance was a guaranteed payment and that retroactivity would impose a financial burden. Id. at 390-91.

As to prospective relief, Judge Haight held, following footnote 4 of Justice O'Connor's concurring opinion in Norris, 463 U.S. at 1111, 103 S.Ct. at 3513, that employers need not "top up" benefits by using male-longevity tables for all workers; rather they can "midpoint," i.e., use sex-neutral tables that reflect the average longevity for all workers. Hannahs, 656 F.Supp. at 392-93. In addition, even though the sex-neutral tables adopted by the New York State Teachers' Retirement System disadvantage men, he dismissed the allegation that they violated New York State Constitution article V, section 7, which guarantees against reduction in vested retirement benefits. He concluded that Title VII superseded any inconsistent state constitutional requirements. Id.

We affirm, for the reasons stated by Judge Haight. However, we leave open the question whether in an appropriate case an employer may be required to "top up" benefits upon a showing that such relief is consistent with the pension fund's viability.