SAN FRANCISCO (AP) -- California's state retirement system has agreed to pay a record $250 million to firefighters, police and other law enforcement officers to settle allegations they were shortchanged on disability benefits because of their age.
The settlement in the age discrimination case was approved Wednesday by a federal judge. It is the biggest settlement of a single lawsuit in the history of the U.S. Equal Employment Opportunity Commission, the federal agency said Thursday.
``We hope that the resolution of this case will cause employers everywhere to review their business practices and to make absolutely sure that they do not discriminate on the basis of age,'' said Susan McDuffie, director of the EEOC's San Francisco district.
The settlement, which affects about 1,700 firefighters and law enforcement workers on disability, effectively nullifies a California law that paid disability benefits to public safety officers based on their age at hire rather than their years of service or a flat benefit.
For example, a 30-year-old rookie police officer injured on duty would receive disability equal to 50 percent of his salary. But his partner, who joined the force at 40, would receive only 30 percent of his salary if injured.
The settlement requires the California Public Employees Retirement System to pay $50 million in retroactive benefits to public safety workers whose job injuries qualified them for disability pay. The system will pay an estimated $200 million more to retirees in the future.
DISABLED PUBLIC SAFETY OFFICERS TO RECEIVE BENEFITS IN HISTORIC EEOC SETTLEMENT FOR AGE DISCRIMINATION
U.S. Equal Employment Opportunity Commission
SAN FRANCISCO - The U.S. Equal Employment Opportunity Commission (EEOC) today announced a major litigation settlement compensating more than 1,700 retired state and local public safety officers who were subjected to age discrimination by the California Public Employees' Retirement System (CalPERS), the nation's largest public retirement fund, and California state and local government employers of public safety officers. Under the Consent Decree approved by Federal District Court Judge Charles Breyer, the class of former employees will receive benefits estimated at $250 million, most of which will be paid in increments over the lifetimes of the individual recipients.
"We are pleased that CalPERS worked cooperatively with the EEOC in bringing a satisfactory resolution to this case," said Commission Chair Cari M. Dominguez. "Through the negotiated settlement process, we were able to jointly come up with a solution that protects the rights of all disabled retirees without discriminating on the basis of age."
The lawsuit, filed under the Age Discrimination In Employment Act of 1967 (ADEA), alleged that the officers suffered discrimination because their industrial disability retirement (IDR) benefits were reduced in proportion to their age at hire. In 1995, former Fremont police officer Ron Arnett and six other disabled retirees challenged CalPERS' enforcement of the California Government Code Section 21417, by filing the lawsuit resolved by today's settlement.
For each year over age 30 that a public safety officer was hired, Section 21417 reduced the amount of industrial disability pensions below the 50% of compensation standard - in essence, the more years over age 30 at hire, the less one was entitled to receive if seriously injured on the job. Thus, Mr. Arnett, who joined the police at age 43, was given 32% instead of 50% of his salary for his IDR benefit when he suffered permanently disabling injuries after five years of service.
By contrast, if Mr. Arnett had simply been 30 at his time of hire - 14 years younger but with the same work record, the same contributions to CalPERS over the same period of time, and the same injuries - he would have been entitled to half his pay.