Pension Parity

Court gives women a break

That women live longer than men is a fact of, well, life. Under many pension plans, women pay for it in bigger paycheck deductions for retirement benefits or smaller payments once they have started collecting. Last week the Supreme Court ruled, 6 to 2, that charging women more than men to participate in a pension plan violates a congressional ban on sex discrimination. In a decision hailed as a victory for the equal rights movement, the court stated that employers may no longer exact a larger contribution from women than from men. By paying the same rate, the court acknowledged, men will be subsidizing women to some extent; in the U.S., life expectancy at birth for males is only 69 years, v. 77 years for females. But "when insurance risks are grouped," wrote Justice John Paul Stevens for the majority, "the better risks always subsidize the poorer risks."

Chief Justice Warren Burger, dissenting with Justice William Rehnquist, maintained that Congress in its 1964 Civil Rights Act never intended an "effect upon pension plans so revolutionary and discriminatory -this time favorable to women at the expense of men." At least for the time being, the court's ruling is limited to contributory pension plans -most of which are for public employees -in which women make a greater contribution. The ruling does not yet invalidate plans in which the contributions are equal but not the benefits. qed

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