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The California Public Employees’ Retirement System and the Equal Employment Opportunity Commission have settled an age discrimination suit by agreeing to pay an estimated $250 million in disability benefits to a class of more than 1,700 public safety officers. In a consent decree approved by U.S. District Court Judge Charles Breyer on Wednesday, CalPERS, the nation’s largest public retirement fund, affirmed that it would abandon a system that tied disability benefit payments to an employee’s age. The agreement in Arnett and EEOC v. California Public Employees’ Retirement System, Northern District of California, Civil No. 95-03022 CRB, ends an eight-year legal battle that went all the way up to the U.S. Supreme Court. According to EEOC senior trial attorney David Offen-Brown, the consent decree represents the largest recovery, through trial or settlement, in EEOC history. “Our mission is to stop the discrimination and try and make the victims whole, and we’ve been able to do this in a big way in this case,” said Offen-Brown. “So it’s very satisfying.” The suit was originally filed in 1995 by Ron Arnett, a Fremont police officer who was injured during an on-the-job training exercise, and six other disabled public safety officers. Because Arnett was 43 at the time he was hired, his disability payments were 32 percent of his salary instead of the 50 percent officers hired at 30 years of age received. The system followed a 1980 state law which limited industrial disability retirement benefits by pegging the amount of benefits to the age at which a public employee was hired. In some cases, says Offen-Brown, disabled employees were receiving 12 percent of their salaries. Filed on behalf of 1,700 disabled California police officers and firefighters, the suit alleged that this disability benefit system was a violation of the federal Age Discrimination in Employment Act. The public safety officers were represented by Cerritos solo attorney Steven Pingel. CalPERS petitioned the U.S. Supreme Court for review after the Ninth Circuit U.S. Court of Appeals sided with the plaintiffs. The high court vacated the Ninth Circuit decision based on its own ruling ( Kimel v. Florida Board of Regents, 528 U.S. 62 (2000)) that sovereign immunity barred private individuals from suing state employers under the ADEA. In July 2000, the EEOC’s San Francisco office took up the case, since it was not barred from suing the government. Under the terms of the consent decree, CalPERS agrees to stop calculating industrial disability retirement according to the 1980 law. While the consent decree does not include an actual dollar figure, the $250 million is an EEOC estimate based on the specific terms of the settlement. The agreement stipulates that CalPERS will pay the 1,700 class members the difference between the amount of disability payments they received and 50 percent of their salary through July 2001, an amount valued at $50 million. The EEOC estimates that there will be another $200 million in future payments to be paid out over the remainder of the officers’ lifetimes. A CalPERS representative was unavailable for comment.

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