UNITED STATES SUPREME COURT DECISIONS ON-LINE

Los Angeles Dept. of Water & Power v. Manhart, 435 U. S. 702, held that unequal pension plan contributions for male and female employees based on actuarial tables reflecting women's greater life spans violated the sex discrimination prohibitions of Title VII of the Civil Rights Act of 1964. Arizona Governing Committee for Tax Deferred Annuity & Deferred Compensation Plans v. Norris, 463 U. S. 1073, extended this nondiscrimination principle to unequal benefits payments. Florida's Retirement System (Florida System) for state and local government employees has always required equal contributions and equal "normal" benefits for similarly situated male and female employees. Until Norris, the Florida System also offered three retirement benefit options that were calculated in accordance with sex-based actuarial tables yielding lower monthly benefits for male retirees. Immediately after Norris, Florida adopted unisex actuarial tables equalizing benefits under all of the offered plans for similarly situated male and female employees retiring after Norris' effective date. Respondents, male employees who had retired before that date as optional plan participants, filed a class action in Federal District Court, alleging that the optional plans violated Title VII. The court entered summary judgment for respondents, awarding relief to class members who retired after Manhart's, and before Norris', effective date, by retroactively "topping up" monthly benefits to the current unisex levels for the period between Manhart and the date of the court's judgment. Class members were also awarded topped-up future benefits, commencing on the latter date. The Court of Appeals affirmed.

Held:

1. Norris, rather than Manhart, establishes the appropriate date for commencing liability for employer-operated pension plans that offered discriminatory payment options, and liability may not be imposed for pre-Norris conduct. Pp. 487 U. S. 229-238.

(a) Contrary to the Court of Appeals' holding, Manhart did not place Florida on notice that optional pension plans offering sex-based benefits violated Title VII. Manhart carefully limited its holding to unequal contributions, as distinct from benefits payments, and recognized an open market exception allowing each employee to purchase with the clubjuris

Page 487 U. S. 224

contributions made on his or her behalf the largest benefit commercially available. In view of the substantial departure from existing practice that Manhart ordered, pension fund administrators could have reasonably concluded that the decision was confined to sex-based contributions, and did not prohibit plans from offering optional sex-based annuities similar to those offered by insurance companies on the open market, as long as the options included a sex-neutral benefit. Thus, Florida's continuance of the optional plans until Norris -- which expressly prohibited unequal benefits and excluded from the open market exception plans which offered annuities duplicating those available from private companies -- does not justify imposition of a retroactive award. Pp. 487 U. S. 230-235.

(b) In the pension context, retroactive awards are not necessary to further Title VII's purposes and to ensure compliance with this Court's decisions, since Florida acted immediately after Norris to correct its discriminatory optional plans, and there is no evidence that employers in general have not complied with the requirements of Manhart and Norris. P. 487 U. S. 235.

(c) The imposition of retroactive liability on the States, local governments, and other employers that offered sex-based pension plans to their employees would be inequitable, particularly since it would impose financial costs that would threaten the security of both the plans and their beneficiaries. The appropriateness of retroactive relief must be based upon broad principle, and not solely upon the particular circumstances of a case. Thus, the fact that the Florida System currently possesses a surplus, and can afford the awards against it, cannot control here, since basing an award on a particular pension fund's current financial status would amount to imposing a penalty for prudent management. Similarly, the fact that Florida's pension administrators might have speculated in internal memoranda and discussions that Manhart prohibited the continuation of sex-based benefits cannot authorize retroactive awards, since the meaning and scope of a decision does not rest on its subjective interpretation by discrete, affected persons and their legal advisers. Pp. 487 U. S. 235-238.

2. Both awards made by the District Court are impermissible. The first award, which requires prejudgment benefits adjustments, is retroactive without doubt, and is therefore prohibited by this decision. The second award, which requires postjudgment adjustments, is also fundamentally retroactive, even though it relates to future payments, since it increases benefits that were meant to be fixed on the basis of contribution levels and actuarial assumptions applicable when the retirement occurred and funding provisions were made, thereby undermining the plan's basic financial calculus and affecting its ability to meet its accrued obligations. It is not correct to consider benefits payments based on a clubjuris

Page 487 U. S. 225

retirement that has already occurred as a sort of continuing violation, since this would ignore the essential assumptions of an actuarially funded pension plan, and would in every case render employers liable for all past conduct regardless of whether the liability principle was first announced by Manhart, Norris, or this decision. Pp. 487 U. S. 238-240.

805 F.2d 1542, reversed.

KENNEDY, J., delivered the opinion of the Court, in which REHNQUIST, C.J.,and WHITE, O'CONNOR, and SCALIA, JJ., joined. BLACKMUN, J. filed an opinion concurring in part and dissenting in part, in which BRENNAN and MARSHALL, JJ., joined, post, p. 487 U. S. 240. STEVENS, J., filed a dissenting opinion, post, p. 487 U. S. 247.