## Facts

- Kentucky administered a retirement plan for employees in hazardous positions, including normal retirement and disability retirement.
- Normal retirement was available after 20 years of service (regardless of age) or at age 55 with at least 5 years of service.
- Disability retirement was available only for employees who became permanently disabled before qualifying for normal retirement.
- For pre-eligibility disabilities, the plan calculated disability benefits by imputing additional years of service up to the time needed to reach normal retirement eligibility (subject to a cap tied to prior service).
- If an employee became disabled after becoming eligible for normal retirement, the plan did not impute additional years; the employee received normal retirement benefits based on actual service.
- Charles Lickteig became eligible for normal retirement at age 55, continued working, and became disabled at age 61; his benefit was calculated without imputed years.
- The EEOC sued under the ADEA, alleging the plan discriminated because the imputation rule turned on eligibility criteria that included age.

## Issues

1. Whether a disability-retirement scheme that uses an age-based normal-retirement eligibility threshold to determine more generous disability benefits constitutes disparate-treatment age discrimination under the ADEA.
2. Whether the EEOC had to show that age, rather than pension status, actually motivated the challenged benefit determination.

## Decision

- The Supreme Court reversed the Sixth Circuit and held the plan did not violate the ADEA.
- The Court applied disparate-treatment principles requiring proof that age actually motivated the adverse decision.
- The plan’s use of age was treated as part of a pension-status classification (eligible vs. not eligible for normal retirement), not as a proxy for bias against older workers.
- The imputed-years feature was viewed as a remedial mechanism to place pre-eligibility disabled workers in a position comparable to those who could have worked until normal retirement.
- Because Lickteig was already eligible for normal retirement when he became disabled, denying imputed years reflected the plan’s structure, not age-based animus or stereotyping.

## Legal Principles

- ADEA disparate-treatment liability requires proof that age actually motivated the employer’s decision; correlation with age is insufficient.
- Age and pension status are analytically distinct; use of age within a retirement formula does not automatically establish discrimination “because of” age.
- When age appears in a benefits scheme to define pension status categories, a plaintiff must show that age, not pension status, made the difference and reflected prohibited age bias or arbitrary discrimination.
- A benefits design that compensates for disability occurring before normal-retirement eligibility may lawfully provide different calculations for post-eligibility disabilities absent proof of age-based motivation.

## Conclusion

The Court held that Kentucky’s disability-retirement imputed-years rule did not constitute prohibited age discrimination because it operationalized pension eligibility status and lacked proof that age-based bias actually motivated the benefit outcome.


Ky. Ret. Sys. v. Equal Emp. Opportunity Comm'n, 554 U.S. 135 (2008)