Opinion

JUSTICE O'CONNOR, concurring.

This case requires us to determine whether Title VII prohibits an employer from offering an annuity plan in which the participating insurance company uses sex-based tables for calculating monthly benefit payments. It is important to stress that our judicial role is simply to discern the intent of the 88th Congress in enacting Title VII of the Civil Rights Act of 1964, [ Footnote 3/1 ] a statute covering only discrimination in employment. What we, if sitting as legislators, might consider wise legislative policy is irrelevant to our task. Nor, as JUSTICE MARSHALL notes, ante at 463 U. S. 1078 -1079, n. 4, do we have before us any constitutional challenge. Finally, our decision must ignore (and our holding has no necessary effect on) the larger issue of whether considerations of sex should be barred from all insurance plans, including individual purchases of insurance, an issue that Congress is currently debating. See S. 372, 98th Cong., 1st Sess. (1983); H.R. 100, 98th Cong., 1st Sess. (1983).

Although the issue presented for our decision is a narrow one, the answer is far from self-evident. As with many other narrow issues of statutory construction, the general language chosen by Congress does not clearly resolve the precise question. Our polestar, however, must be the intent of Congress, and the guiding lights are the language, structure, and legislative history of Title VII. Our inquiry is made somewhat easier by the fact that this Court, in Los Angeles Dept. of Water & Power v. Manhart, 435 U. S. 702 (1978), analyzed the intent of the 88th Congress on a related question. The Court in Manhart found Title VII's focus on the individual to be dispositive of the present question. Congress, in enacting Title VII, intended to prohibit an employer from singling out an employee by race or sex for the purpose of imposing a greater burden or denying an equal benefit because of a characteristic statistically identifiable with the group but empirically false in many individual cases. See Manhart, 435 U.S. at 435 U. S. 708 -710.

Despite JUSTICE POWELL's argument, ultimately I am persuaded that the result in Manhart is not distinguishable from the present situation. Manhart did note that Title VII would allow an employer to set aside equal retirement contributions for each employee and let the retiree purchase whatever annuity his or her accumulated contributions could command on the open market. Id. at 435 U. S. 717 -718. In that situation, the employer is treating each employee without regard to sex. If an independent insurance company then classifies persons on the basis of sex, the disadvantaged female worker cannot claim she was denied a privilege of employment, any more than she could complain of employment discrimination when the employer pays equal wages in a community where local merchants charge women more than men for identical items. As I stressed above, Title VII covers only discrimination in employment, and thus simply does not reach these other situations.

Unlike these examples, however, the employer here has done more than set aside equal lump sums for all employees. Title VII clearly does not allow an employer to offer a plan to employees under which it will collect equal contributions, hold them in a trust account, and upon retirement disburse greater monthly checks to men than women. Nor could an employer escape Title VII's mandate by using a third-party bank to hold and manage the account. In the situation at issue here, the employer has used third-party insurance companies to administer the plan, but the plan remains essentially a "privileg[e] of employment," and thus is covered by Title VII. 42 U.S.C. § 2000e-2(a)(1). [ Footnote 3/2 ]

For these reasons, I join Parts I, II, and III of JUSTICE MARSHALL's opinion. Unlike JUSTICE MARSHALL, however, I would not make our holding retroactive. Rather, for reasons explained below, I agree with JUSTICE POWELL that our decision should be prospective. I therefore join Part III of JUSTICE POWELL's opinion.

In Chevron Oil Co. v. Huson, 404 U. S. 97, 404 U. S. 105 -109 (1971), we set forth three criteria for determining when to apply a decision of statutory interpretation prospectively. First, the decision must establish a new principle of law, either by overruling clear past precedent or by deciding an issue of first impression whose resolution was not clearly overshadowed. Id. at 404 U. S. 106. Ultimately, I find this case controlled by the same principles of Title VII articulated by the Court in Manhart. If this first criterion were the sole consideration for prospectivity, I might find it difficult to make today's decision prospective. As reflected in JUSTICE POWELL's opinion, however, whether Manhart foreshadows today's decision is sufficiently debatable that the first criterion of the Chevron test does not compel retroactivity here. Therefore, we must examine the remaining criteria of the Chevron test as well.

The second criterion is whether retroactivity will further or retard the operation of the statute. Chevron, supra, at 404 U. S. 106 -107. See also Albemarle Paper Co. v. Moody, 422 U. S. 405, 422 U. S. 421 (1975) (backpay should be denied only for reasons that will not frustrate the central statutory purposes). Manhart held that a central purpose of Title VII is to prevent employers from treating individual workers on the basis of sexual or racial group characteristics. Although retroactive application will not retard the achievement of this purpose, that goal in no way requires retroactivity. I see no reason to believe that a retroactive holding is necessary to ensure that pension plan administrators, who may have thought, until our decision today, that Title VII did not extend to plans involving third-party insurers, will not now quickly conform their plans to ensure that individual employees are allowed equal monthly benefits regardless of sex. See Manhart, supra, at 435 U. S. 720 -721. [ Footnote 3/3 ]

In my view, the third criterion -whether retroactive application would impose inequitable results -compels a prospective decision in these circumstances. Many working men and women have based their retirement decisions on expectations of a certain stream of income during retirement. These decisions depend on the existence of adequate reserves to fund these pensions. A retroactive holding by this Court that employers must disburse greater annuity benefits than the collected contributions can support would jeopardize the entire pension fund. If a fund cannot meet its obligations, "[t]he harm would fall in large part on innocent third parties." Manhart, supra, at 435 U. S. 722 -723. This real danger of bankrupting pension funds requires that our decision be made prospective. Such a prospective holding is, of course, consistent with our equitable powers under Title VII to fashion an appropriate remedy. See 42 U.S.C. § 2000e-5(g); Manhart, 435 U.S. at 435 U. S. 718 -719.

In my view, then, our holding should be made prospective in the following sense. I would require employers to ensure that benefits derived from contributions collected after the effective date of our judgment be calculated without regard to the sex of the employee. [ Footnote 3/4 ] For contributions collected before the effective date of our judgment, however, I would allow employers and participating insurers to calculate the resulting benefits as they have in the past.

Notes

[ Footnote 3/1 ]

The 92d Congress made important amendments to Title VII, including extending its coverage to state employers such as the State of Arizona. The 1972 amendments did not change the substantive requirements of Title VII, however. Thus, it is the intent of the 88th Congress that is controlling here.

[ Footnote 3/2 ]

The distinction between employment-related discrimination and discrimination not covered by Title VII is ably discussed by Van Alstyne, Equality for Individuals or Equality for Groups: Implications of the Supreme Court Decision in the Manhart Case, 64 AAUP Bulletin 150 (1978).

[ Footnote 3/3 ]

Another goal of Title VII is to make persons whole for injuries suffered from unlawful employment discrimination. See Albemarle Paper Co. v. Moody, 422 U. S. 405, 422 U. S. 418 (1975). Although this goal would suggest that the present decision should be made retroactive, it does not necessarily control the decision on retroactivity. See Manhart, 435 U.S. at 435 U. S. 719.

[ Footnote 3/4 ]

In other words, I would require employers to use longevity tables that reflect the average longevity of all their workers. The Equal Pay Act proviso, 29 U.S.C. § 206(d)(1), which forbids employers to cure violations of the Act by reducing the wage rate of any employee, would not require that employers "top up" benefits by using male-longevity tables for all workers. First, although the Bennett Amendment of Title VII, 42 U.S.C. § 2000e-2(h), incorporates the Equal Pay Act defenses for disparate "compensation" as well as disparate "wages," see Manhart, supra, at 435 U. S. 711 -712, n. 22, the language of the Equal Pay Act proviso seems to apply only to wages. Thus, it is questionable whether the proviso would apply at all to the retirement plan at issue here. Second, even if the proviso has some relevance here, it should not be read to require a pension plan, whose entire function is actuarially to balance contributions with outgoing benefits, to calculate benefits on the basis of tables that do not reflect the composition of the workforce. Cf. Manhart, supra, at 435 U. S. 720, n. 36 (remedy should at least consider "ordering a refund of only the difference between contributions made by women and the contributions they would have made under an actuarially sound and nondiscriminatory plan").