Full opinion text
MEMORANDUM OF DECISION ON PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT JOSÉ A. CABRANES, District Judge. Contents Introduction...................... 527 I. THE PARTIES..................... 529 II. THE FACTUAL BACKGROUND...... 530 A. The Fitzpatrick Litigation ....... 530 B. The Plaintiffs’ Reliance on Pre1975 Law..................... 532 C. The 1975 Act.................. 533 D. The Legislative History of the 1975 Act ..................... 535 III. THE PLAINTIFFS’CLAIMS......... 536 IV. THE CONTRACT CLAUSE OF THE UNITED STATES CONSTITUTION ... 537 A. Introduction .................. 537 B. Connecticut’s Contractual Obligations to the Plaintiffs...........538 1. Contractual Obligations in Pension Plans Under Connecticut Law.................... 588 2. Mere “Gratuities” or Contractual Rights?........... 541 3. The Content of the Plaintiffs’ Contractual Rights and Connecticut’s Obligations ......545 C. Connecticut’s Impairmant of Its Contractual Obligations.......546 D. The Unconstitutionality of Connecticut’s Impairment of Its Contractual Obligations.......547 1. The “Reserved Powers” Doctrine................. 547 2. Judicial Scrutiny Under the United States Trust Co. Tests .....'.............. 548 (a) Necessity............. 549 (b) Reasonableness........ 552 V. CONCLUSION..................... 553 Introduction This action is a sequel to this court’s decision in Fitzpatrick v. Bitzer. In that case, decided in 1974, Chief Judge Clarie held invalid the provisions of the Connecticut State Employees Retirement Act, Conn. Gen.Stat. § 5-152 et seq., which required male employees of the state to work five years longer to earn pension benefits than similarly situated female employees. Judge Clarie ruled that these provisions discriminated against men on account of their sex, in violation of Title VII of the Civil Rights Act of 1964, as amended (“Title VII”). The decision in Fitzpatrick was not appealed by the state, and Connecticut began to administer its retirement statute in a manner consistent with the court’s ruling, permitting both men and women to retire with full pension benefits at the lower ages formerly applicable only to women. At the next legislative session, the General Assembly passed Public Act 75-531 (“the 1975 Act”), which amended the portions of the State Employees Retirement Act which this court found to be discriminatory in Fitzpatrick. The 1975 Act established for all employees retirement ages which were identical to the higher retirement ages applicable only to male employees prior to Fitzpatrick. In this class action, certain male and female employees of the State of Connecticut challenge the constitutionality of the 1975 Act. The state concedes that the effect of the 1975 Act was to require the plaintiffs, who had become state employees and remained in the state’s service in reliance upon the terms of pre-1975 law (as modified by Judge Clarie’s order), to work up to five years longer than that law had required in order to qualify for retirement with full pension benefits. The plaintiffs claim that the 1975 Act therefore impaired the state’s pre-existing contractual obligations to them, in violation of the contract clause of the United States Constitution. The defendants, who are the Connecticut officials ultimately responsible for administering the State Employees Retirement Act, deny that pre-1975 law gave rise to any contractual obligations. They assert that “a pension is not a matter of contract,” but “a gratuity ‘springing from the appreciation and graciousness of the sovereign.’ ” Accordingly, they argue, the plaintiffs have no rights which fall within the scope of the contract clause, even though (as they admit) the state required the plaintiffs to become members of the State Employees Retirement System and to contribute substantially to the fund out of which benefits are paid, and the plaintiffs joined and remained in the state’s employ in reliance upon the terms of pre-1975 law. With due respect, the court declines to follow the defendants’ reasoning. Rather, on the basis of the uncontested facts before the court on the plaintiffs’ motion for summary judgment, the court finds that the state entered into a contractual relationship with the plaintiffs, pursuant to which the state bound itself to permit the members of the plaintiff class to retire from state service on the terms provided by the law which was in effect immediately prior to the adoption of the 1975 Act. The court further finds that the 1975 Act severely impaired the state’s contractual obligations to this class of its employees, and that this impairment is unconstitutional under the criteria set forth by the Supreme Court, for the state has not argued, much less established, that the abrogation of its contractual obligations was either necessary for the achievement of the state’s purposes or reasonable in light of the circumstances. Because the 1975 Act, as applied to the plaintiffs, violates the contract clause of the United States Constitution, the plaintiffs’ motion for summary judgment is granted. An injunction shall be issued against the enforcement of the 1975 Act with respect to those state employees who were in state service on June 30, 1975 (the effective date of the 1975 Act), are still in the state’s service, and will not be eligible to retire with full pension benefits prior to June 30, 1980. Among the plaintiffs to whom the court grants relief from the challenged statutory provisions are female state employees who entered state service prior to the enactment of the 1975 Act. The state has admitted that all of these class members relied on the promise of pension benefits set forth in the pre-1975 version of the State Employees Retirement Act, both before and after it was modified by the decision in Fitzpatrick. The court also grants similar relief to male employees who entered state service prior to the adoption of the 1975 Act. It may be suggested that this decision grants a “windfall” to those male class members who entered state service before this court’s decision in Fitzpatrick by permitting them to retire on terms more favorable than the ones upon which they relied under prior law. However, the court is bound by the state’s admission that these class members either expected to become eligible for pension benefits on terms as favorable as those extended to female employees under preFitzpatrick law, or remained in state service after the Fitzpatrick decision in reliance upon the promise of benefits identical to those of female employees which was held out to them by the state following that decision. Moreover, even apart from the question of the expectations of this group of class members, all males who were in the state’s employ at the time of the Fitzpatrick decision became entitled, under the terms of Judge Clarie’s order, to retire on the terms applicable to similarly situated female employees under the former law. The court cannot deny any males in the plaintiff class the right to retire on the terms to which similarly situated female class members are entitled without in effect undoing Judge Clarie’s decision in Fitzpatrick. Nothing in this ruling affects the application of the 1975 Act, on a prospective basis, to employees who were not in the state’s service on June 30, 1975, and who therefore had no contractual rights to retire on the more advantageous terms afforded by prior law. The court holds only that the retroactive application of the more stringent requirements for pension eligibility contained in the 1975 Act to the discrete class of state employees who brought this action is unconstitutional. The rules on retirement ages enforced by this decision are those embodied in contractual arrangements between the state and its employees prior to June 30, 1975. In holding the 1975 Act unconstitutional to the extent that it changed those rules retroactively as applied to the plaintiffs, the court makes no judgment concerning the wisdom of the pension policies which the state enforced prior to the enactment of the 1975 Act, or, indeed, concerning the policies embodied in the 1975 Act. Any harm to the state treasury which may be caused by the court’s enforcement of the state’s contractual obligations—and the state has neither shown nor suggested the existence of such harm—is the direct result of obligations assumed by the state itself and of prior judicial determinations, binding on the state, which required that Connecticut’s male employees be accorded the same rights as female employees under the state’s retirement system. I. THE PARTIES The plaintiff class, as certified in this court’s order of February 20, 1979, consists of “all existing employees of the State of Connecticut who will not reach normal retirement age prior to June 30, 1980 and who were such employees on June 30, 1975.” It includes both male and female employees. The phrase “normal retirement age” refers to the age at which employees are permitted to retire with pension benefits, under the State Employees Retirement Act, without regard to special provisions for early retirement. The defendants are William G. Oechslin, chairman of the State Employees Retirement Commission, Henry G. Parker, Treasurer of the State of Connecticut, and J. Edward Caldwell, Comptroller of the State of Connecticut and Secretary of the State Employees Retirement Commission. 'The State Employees Retirement Commission is responsible for administering the State Employees Retirement System and all other retirement systems of the State of Connecticut except the Teachers’ Retirement Fund. Conn.Gen.Stat. § 5—155(d). Nearly all of Connecticut’s employees are required by law to belong to the State Employees Retirement System. The members of the State Employees Retirement System must choose one of two benefit plans. The first of these plans is independent of the federal Social Security program; the other is coordinated with it. See Conn.Gen.Stat. §§ 5-157, 5-158a-g. Under either plan, the employees are required to make contributions to the State Employees Retirement Fund, out of which the members’ retirement benefits are paid. Indeed, employees have been required to contribute to the retirement fund since 1939, when the retirement system was established. An employee not covered by Social Security must contribute 5% of his or her salary to the fund, Conn.Gen.Stat. § 5-161(b), while an employee who has Social Security coverage must contribute to the fund an amount equal to 2% of that part of his or her salary on which the state makes Social Security contributions plus 5% of the remainder of his or her salary, Conn.Gen.Stat. § 5-161(a). Actuarial studies by the state demonstrate that, depending upon the plan selected, the age of retirement and the sex of the employee, between 12% and 25% of an employee’s benefits is attributable to his or her contributions, including the interest accrued on those contributions. The balance of the benefits paid out of the State Employees Retirement Fund is attributable to appropriations by the state. See Conn. Gen.Stat. § 5-156a. II. THE FACTUAL BACKGROUND The facts relevant to the pending motion are rather complex. However, they are not in dispute. Much of the factual background is a matter of public record, particularly the record of the Fitzpatrick litigation. The other relevant facts were admitted by the defendants or stipulated by the parties. A. The Fitzpatrick Litigation A brief recapitulation of the history of the- Fitzpatrick litigation is the logical starting point for the narrative of the facts relevant here. The Fitzpatrick plaintiffs were members of the class of male state employees and former employees who belonged to the State Employees Retirement System. Fitzpatrick v. Bitzer, supra, 390 F.Supp. at 279. They challenged the following statutory provisions then in effect: (1) Former Conn.Gen.Stat. § 5-162(c)(l), which allowed an employee with 25 years of state service to retire with pension benefits “on or after the member’s fifty-fifth birthday, if a man, or fiftieth birthday, if a woman”; (2) Former Conn.Gen.Stat. § 5-162(d)(l), which allowed any female employee with at least 10, but less than 25, years of state service to retire with pension benefits at age 60, but only permitted a male employee who had served for that period of time to retire with pension benefits at age 65; (3) Former Conn.Gen.Stat. § 5-162(d)(3), which provided that the calculation of retirement benefits be made according to a table based on age and sex, which ensured that a female retiree would receive retirement benefits equal to those received by a male retiree five years her senior; (4) Former Conn.Gen.Stat. § 5-163(c), which permitted an employee whose state service was terminated under one of certain enumerated conditions to retire with pension benefits after the completion of 25 years of state service “before he has reached his fifty-fifth birthday, if a man, or her fiftieth birthday, if a woman . . . and (5) Former Conn.Gen.Stat. § 5-166(a), which provided that, in certain circumstances, an employee who left state employment before reaching the normal age of eligibility would be eligible for retirement income, on a reduced actuarial basis, at age 55 if male, or age 50 if female. See Fitzpatrick v. Bitzer, supra, 390 F.Supp. at 281. In Fitzpatrick, Judge Clarie held that these statutory provisions violated Title VII of the Civil Rights Act of 1964, as amended in 1972. Fitzpatrick v. Bitzer, supra, 390 F.Supp. at 288. . The court granted the plaintiffs’ request for injunctive relief, prohibiting the defendants from administering the State Employees Retirement Act in a discriminatory manner in the future. Id. at 290. The court’s order stated: “The defendants are accordingly ordered to administer the State Employees’ Retirement Act without unreasonable sex classifications unfavorable to men as they relate to retirement age and benefit computations; so that men will be eligible to retire at age 50 and receive the same treatment as similarly situated women. Nothing herein shall be construed to interfere with the State Legislature performing its constitutional function of freely determining public policy, as it pertains to deciding upon a uniform retirement age for all men and women employees of the State of Connecticut in the future, provided the same is carried out without discrimination as to age or benefits on the basis of sex.” 390 F.Supp. at 290 (emphasis added). As a result of this order, from which, as noted, the state did not appeal, the State of Connecticut enforced the existing provisions of the State Employees Retirement Act so that men were treated precisely as women previously had been treated. Men with 25 years of continuous service were thus permitted to retire at age 50 after Judge Clarie’s order; other men in state service were likewise permitted to retire upon the terms applicable to similarly situated females. B. The Plaintiffs’ Reliance on Pre-1975 Law Through admissions and exhibits obtained from the defendants, the plaintiffs have established the following facts relevant to the question of the plaintiffs’ reliance on the law as it stood prior to the 1975 Act. At least since 1971, employees and prospective employees of the State of Connecticut have been made aware of the retirement benefits available to them under state law, at or before the time they were hired. Moreover, prospective employees have frequently inquired, before entering the state’s employ, about Connecticut’s retirement benefit laws, the State Employees Retirement System and the benefits to which they would be entitled if they became state employees. The booklet which the state distributes to new employees to describe the State Employees Retirement System declares: “You may retire—and receive immediate retirement benefits—at any time after you reach the minimum permissible retirement age.” Nowhere in that booklet does the state expressly reserve the right to change the minimum permissible retirement ages, and the defendants have not argued that the state ever conveyed to the plaintiffs any intention to reserve such rights. State employees rely upon the information which the state conveys to them about its retirement laws, systems and benefits, without regard to subsequent changes adverse to them. Indeed, some of the plaintiffs accepted state employment, leaving otherwise more lucrative positions, because of superior retirement benefits available to them as state employees. After joining state service, Connecticut’s employees frequently inquire about retirement benefits, including the options available to them under state law and the ages at which state law entitles them to retire with benefits. . The information which state employees learn from such inquiries is a material and substantial factor in their personal retirement plans. Accordingly, the terms of the State Employees Retirement Act are substantial inducements for prospective employees to enter state service and for those already in the state’s employ to remain in state service. The law upon which female members of the plaintiff class relied was the State Employees Retirement Act, as it read prior to its amendment in 1975. The provisions of that law which governed the retirement ages and benefits of women were in no way affected by the decision of the court in Fitzpatrick. Prior to that decision, which was filed on September 16, 1974, the law upon which most male employees relied contained the discriminatory provisions—requiring men to work longer than women to become eligible for equivalent benefits—which were held unlawful in Fitzpatrick. It is admitted, however, that even before the Fitzpatrick decision was announced, “an indeterminate number of male state employees believed that they would obtain, through legislative or judicial action, equal treatment with women under the state’s retirement laws, i.e., that the retirement ages and benefits applicable to women would be made available to them through a change in the laws.” In any event, the Fitzpatrick decision changed the law to enable men to retire on the terms formerly applicable only to women, and between September 1974 and June 1975 both prospective male employees and men already in state service learned, either from pension benefit information disseminated by the state or from other sources, that the retirement ages and benefits applicable to men had, by virtue of this court’s order, become identical to those applicable to women. The law upon which male members of the plaintiff class were relying just before the adoption of the 1975 Act was therefore the rule articulated by Judge Clarie in Fitzpatrick: men already in state service had the right to retire at the same ages and with the same levels of benefits as female state employees. See Fitzpatrick v. Bitzer, supra, 390 F.Supp. at 290. C. The 1975 Act The 1975 Act amended the State Employees Retirement Act in a number of ways. As the plaintiffs contend, and the defendants concede, the thrust of the amendments was to require certain employees, both male and female, to work as many as five years longer than they were required to work by prior law (i.e., the State Employees Retirement Act, as modified by this court’s decision in Fitzpatrick) in order to obtain the same level of pension benefits. The 1975 Act did not have this effect on all employees, for it contained a “grandfather clause” which exempted from the more stringent age requirements for eligibility those employees who would reach, before June 30, 1980, the lower age threshold imposed by prior law; as a result of this provision, the 1975 Act affected only the plaintiffs and those who entered state service after June 30, 1975. The specific statutory provisions which the plaintiffs challenge are the following: (1) Amended Conn.Gen.Stat. §§ 5-162(c) and 5-162(d), which require an employee to reach the age of 55, if he or she has completed 25 years of state service, or the age of 60, if he or she has completed at least 10 but less than 25 years of state service, before retiring with benefits. Immediately prior to the enactment of these amended provisions, such employees could retire with benefits at ages 50 and 55, respectively. These subsections also establish benefit schedules which reduce the levels of retirement benefits that some members of the plaintiff class can expect. (2) Amended Conn.Gen.Stat. § 5-163(c), which provides that an employee whose state service is terminated under certain conditions is entitled to retirement benefits if he or she has completed 25 years of state service, but has not yet reached his or her 55th birthday. The applicable age for such an employee had been 50 under the law which had been enforced by the state immediately prior to the adoption of the 1975 Act. (3) Amended Conn.Gen.Stat. § 5-166(a), which provides that an employee who leaves state service under certain conditions before becoming eligible for retirement with pension benefits under other provisions of the statute shall nonetheless be eligible for a pension on a reduced actuarial basis upon attaining the age of 55. Under the law as applied immediately prior to the enactment of the 1975 Act, such an employee was eligible for these benefits at age 50. (4) Conn.Gen.Stat. § 5-163a, which permits any employee reaching either (a) the age of 50 and his or her 25th year of state service, or (b) the age of 55 and his or her 10th year of state service, prior to June 30, 1980 to retire with a pension at full benefit levels before that date. This provision protected these classes of state employees from the more stringent age qualifications embodied in other provisions of the 1975 Act, but left the members of the plaintiff class exposed to the more restrictive standards of the new law. The effects of these provisions of the 1975 Act on the named individuals who represent the plaintiff class illustrate the types of injuries which the 1975 Act inflicts upon the plaintiffs’ expectations. For example, plaintiff Karen Pineman, who is now 44 years old, has been in continuous state service since January 16, 1956. Under former Conn.Gen.Stat. § 5-162(c)(l), which, as applied to female employees, was unaffected by Judge Clarie’s 1974 order, she could have expected to retire with pension benefits at age 50—i.e., in 1986. The 1975 Act requires her to work an additional five years—until 1991—to receive benefits at the same levels. Plaintiff Alphonse S. Marotta is in an analogous position. He is 45 years old and has been in continuous state service since June 20, 1955. Former Conn.Gen.Stat. § 5-162(c)(l) would have required him, solely as a consequence of his sex, to work until his 55th birthday in order to obtain the benefits due him as a 25 year veteran of continuous state service. However, the order of this court in Fitzpatrick, which required the state to administer its retirement statute “so that men will be eligible to retire at age 50,” changed the expectations of men in Mr. Marotta’s position. After the court’s order in Fitzpatrick, but before June 30, 1975 (the effective date of the 1975 Act), such male employees were permitted to retire with pension benefits at age 50. Indeed, the 1975 Act continued to allow retirement with full benefits at age 50 for employees who had served the state for 25 years and reached age 50 before June 30, 1980. Conn.Gen.Stat. § 5-163a. However, because Mr. Marotta will not reach age 50 until after June 30, 1980, under the 1975 Act he will have to wait until his 55th birthday, in 1990 (rather than his 50th birthday, in 1985), to retire with pension benefits. Plaintiff Alfred K. Tyll is in a similar situation. He is 48 years old and will have completed 25 years of continuous state service by June 30, 1980. The 1975 Act requires him to work until age 55—i.e., 1987 —before he may retire with pension benefits; the law in effect after Fitzpatrick but before the 1975 Act would have permitted his retirement with full benefits in 1982, when he turns 50. Under the 1975 Act, Mr. Tyll is eligible for full retirement benefits only after working five years longer than he would have been required to work under prior law. The 1975 Act forces some employees to choose between working longer than previous law would have required in order to receive retirement benefits at the levels they expected and retiring prematurely with retirement income calculated at lower benefit levels. For example, plaintiff Daniel Clifford, who is 47 years old and began state service on September 15, 1959, would have been entitled to a full pension in 1984 (after 25 years of service) but for the 1975 Act. However, its provisions require him either to work until 1988, when he reaches the age of 55 and thereby qualifies for retirement with full pension benefits, or to retire before that time with vested retirement income on a reduced actuarial basis, pursuant to amended Conn.Gen.Stat. § 5-166(a). If he chooses the latter option, Mr. Clifford will receive something less than the full pension benefits at age 50 which he would have obtained had the 1975 Act’s retroactive provisions not become law. Plaintiff Judith Narus is put to the same choice by the 1975 Act; she may either work longer than prior law required to receive benefits at the usual full pension levels, or retire before reaching her 55th birthday and accept benefits calculated at a lower level. Finally, the practical effect of the 1975 Act is to reduce the benefits of some plaintiffs who have served the state for less than 25 years, pursuant to the benefit schedule set forth in amended section 5-162(d). For example, under prior law, plaintiff Rose Schewe, who will have completed fifteen years of state service on September 10, 1980, would have received monthly benefits including 2.5% of her earnings in excess of the amount on which the state made Social Security contributions, multiplied by her years of service. However, under the 1975 Act, this component of her benefits will be calculated on the basis of a 2.0% multiplier for “excess earnings” if she retires after reaching age 65, but before her 70th birthday. Only if she continues to work until she reaches age 70 will Ms. Schewe become eligible, under the 1975 Act, to receive benefits calculated at the 2.5% rate to which she would formerly have been entitled at age 65. D. The Legislative History of the 1975 Act The 1975 Act had its origins in House Bill 5176, which was introduced on the floor of the Connecticut House of Representatives on June 3, 1975. See General Assembly Proceedings 1975: House of Representatives 6342-43. The original version of this bill would have raised the retirement age only for those who would become state employees after June 30, 1975. It did not purport to have any retroactive effect. The bill was, however, amended on the floor to provide that one group of employees already in state service—the members of the plaintiff class—would, along with future generations of state employees, be subject to the more stringent age qualifications for pension eligibility. In the words of the amendment’s sponsor, “[t]his amendment restores males who are under age 45 to the [age] 55 retirement that was in effect before the recent Court decision, and it established] age 55 for females who are presently under age 45.” Id. at 6346 (remarks of Rep. Wright). After brief debate, the House passed the bill, as amended. Id. at 6362. The next day, the Senate passed the bill in the same form. General Assembly Proceedings 1975: Senate 3590. Neither the House of Representatives nor the Senate held public hearings on the legislation which became the 1975 Act. See id. at 3582 (remarks of Sen. Rome). Although there are no formal reports explaining the legislature’s purpose in passing the 1975 Act, it is clear from the debates in both houses that the General Assembly was reacting to the decision in Fitzpatrick with a view toward achieving two related objectives: (1) putting an end to Connecticut’s policy of permitting certain state employees to retire with pension benefits at age 50, which many legislators believed to be an unduly early retirement age, and (2) saving money by reducing the expenses which the state incurs to fund its share of the State Employees Retirement System. On the House floor, the amended bill’s sponsor, Representative Wright, brought these two aims of the legislation into sharp focus. Condemning past Connecticut policy which allowed some state employees to retire at age 50, he said: “I don’t think there is any other state or probably any municipality that has a retirement age that allows employees to retire at age 50 and receive 50% of their pay. This is far more liberal than is provided in [sic] any public employer, and one that I think if we don’t correct it can bankrupt the State of Connecticut.” General Assembly Proceedings 1975: House of Representatives 6346. Citing a report which estimated that the amended bill would save between $3,000,000 and $5,000,000 in 1975-76, Representative Wright added, “I’m sure the House will be able to find a place to use that three to five million dollars, should this amendment pass.” Id. Another proponent of the amended bill, Representative Dice, stated: “[Tjhere are very few, if any, retirement plans where you can retire at age 50. The only one that I know is the military service, and I hope our state employees are not equivalent to being in the military service, where they would have, to go overseas to that extent.” Id. at 6347—48. Representative Dice added that Connecticut faced the risk of bankruptcy if it did not reduce its pension obligations, comparing the situation to that of New York City. Id. at 6348. Representative Mannix offered a similar assessment of the situation: “Most, if not all, of the taxpayers who have a retirement plan in the State of Connecticut can normally retire at age 60. They’re being asked by us and the government of the State to underwrite a retirement plan at age 50. To me, this is inexcusable. Something’s got to be done. If we continue on this way, as has been pointed out, we’re going to end up in bankruptcy.” Id. at 6348. The day after the amended bill cleared the House, the Senate took up the measure. The remarks made by the bill’s supporters in the upper chamber paralleled those made by its advocates in the House. Senator Hennessey expressed the view that “we’re just trying to straighten out a Court decision.” General Assembly Proceedings 1975: Senate 3579. The thrust of the position of the bill’s supporters was that “50 years of age is an unreasonable age for retirement,” id. at 3578 (remarks of Sen. Amenta); see also id. at 3582 (remarks of Sen. Fauliso); id. at 3588 (remarks of Sen. Ciarlone), and that the bill would save Connecticut $3,600,-000 in the next fiscal year alone, see id. at 3575 (remarks of Sen. Baker); id. at 3586-87 (remarks of Sen. Houley). A study prepared by the actuary of the pension fund was reported to have established that, in fiscal year 1975-76, the state would save $800,000 by prospectively raising the retirement age for new employees, and another $2,800,000 by extending that provision to those persons already in the state’s employ who would not be eligible to retire with pension benefits under after June 30, 1980—i.e., the plaintiffs in this action. Id. at 3587 (remarks of Senator Houley). As Senator Houley noted, enacting the amended bill would permit the state to start realizing savings on its appropriations for the State Employees Retirement Fund in the very fiscal year for which the legislature had just passed a budget. Id. III. THE PLAINTIFFS’ CLAIMS The plaintiffs’ principal contention is that the 1975 Act operates to impair the state’s contractual obligations to them, in violation of the contract clause of the United States Constitution. They seek a declaratory judgment establishing that the 1975 Act, as applied to the plaintiff class, is unconstitutional, as well as injunctive relief requiring the defendants to administer the State Employees Retirement Act, insofar as it applies to the plaintiffs, without regard to the provisions of the 1975 Act. They do not challenge the constitutionality of the prospective application of the 1975 Act to those who became state employees after June 30, 1975. The plaintiffs would require the state to permit them to retire with full pension rights (a) upon completion of 25 years of continuous state service, at age 50; and (b) upon completion of at least 10, but less than 25, years of continuous state service, at age 55. In addition, the terms of retirement and the benefit levels for which the plaintiffs would be eligible would be those which were applied to all state employees retiring in the period after this court’s Fitzpatrick decision, but prior to the 1975 Act. These are the same terms and benefits which the state—consistently with Title VII—afforded all employees, regardless of sex, immediately after the Fitzpatrick decision, and which were preserved by the 1975 Act for those employees covered by its “grandfather clause,” Conn.Gen.Stat. § 5-163a. IV. THE CONTRACT CLAUSE OF THE UNITED STATES CONSTITUTION A. Introduction The constitutional provision invoked by the plaintiffs reads simply: “No State shall pass any . . Law impairing the Obligation of Contracts . . . . ” U.S.Const. art. I, § 10, cl. 1. However, the analysis of a contract clause challenge to state legislation is anything but simple. While the language of the Constitution is, on its face, absolute, a substantial body of Supreme Court cases demonstrates that the contract clause does not prohibit every impairment by a state of contractual obligations. See, e. g., El Paso v. Simmons, 379 U.S. 497, 85 S.Ct. 577, 13 L.Ed.2d 446 (1965); Home Building & Loan Association v. Blaisdell, 290 U.S. 398, 54 S.Ct. 231, 78 L.Ed. 413 (1934). Nonetheless, the Supreme Court has recently reminded us that the contract clause “is not a dead letter,” Allied Structural Steel Co. v. Spannaus, 438 U.S. 234,241, 98 S.Ct. 2716, 2721, 57 L.Ed.2d 727 (1978), and that it requires particularly careful examination of state legislation which impairs a contract to which the state itself is a party, id. at 244 n.15, 98 S.Ct. at 2722 n.15; United States Trust Co. v. New Jersey, 431 U.S. 1, 22-23, 25-26, 97 S.Ct. 1505, 1517-1518, 1519, 52 L.Ed.2d 92 (1977). In United States Trust Co., the Court, in an opinion by Justice Blackmun, reaffirmed the continuing vitality of the contract clause in modern constitutional law: “Both [Home Building & Loan Association v. Blaisdell and El Paso v. Simmons, supra ] eschewed a rigid application of the Contract Clause to invalidate state legislation. Yet neither indicated that the Contract Clause was without meaning in modern constitutional jurisprudence, or that its limitation on state power was illusory. Whether or not the protection of contract rights comports with current views of wise public policy, the Contract Clause remains a part of our written Constitution.” 431 U.S. at 16, 97 S.Ct. at 1514. In United States Trust Co., as here, the question was whether a state law violated the contract clause by impairing a state’s own contractual obligations to private parties. At issue there was the constitutionality of a 1974 New Jersey statute which, together with an identically worded New York statute, repealed a 1962 covenant (itself embodied in legislation enacted by both states) limiting the ability of the bi-state Port Authority of New York and New Jersey to use its revenues and reserves to subsidize unprofitable rail passenger transportation between the two states. The plaintiff, a New York bank, was a substantial holder of Port Authority bonds subject to the covenant and was a trustee for two series of such bonds. The Court in United States Trust Co. held that the retroactive appeal of the 1962 covenant was an unjustifiable impairment of the state’s contractual obligations to the plaintiff, in violation of the contract clause. Citing such venerable authority as Fletcher v. Peck, 10 U.S. (6 Cranch) 87, 137-39, 3 L.Ed. 162 (1810) and Trustees of Dartmouth College v. Woodward, 17 U.S. (4 Wheat.) 518, 4 L.Ed. 629 (1819), the Court observed that “[i]t long has been established that the Contract Clause limits the power of the States to modify their own contracts as well as to regulate those between private parties.” United States Trust Co. v. New Jersey, supra, 431 U.S. at 17, 97 S.Ct. at 1515. At the same time, the Court noted, “the Contract Clause does not prohibit the States from repealing or amending statutes generally, or from enacting legislation with retroactive effects.” Id. (footnote omitted). Where, as here, it is claimed that the contract clause prohibits a state’s statutory modification of its own obligations, the court must determine whether contractual obligations within the purview of the contract clause exist; if so, whether the state legislation under attack impaired those obligations; and if there is an impairment of contract, whether it is forbidden by the Constitution. See generally United States Trust Co. v. New Jersey, supra, 431 U.S. at 21-32, 97 S.Ct. at 1517-1522. B. Connecticut’s Contractual Obligations to the Plaintiffs A statute gives rise to a contractual obligation which is subject to the contract clause “when the language and circumstances evince a legislative intent to create private rights of a contractual nature enforceable against the State.” United States Trust Co. v. New Jersey, supra, 431 U.S. at 17 n. 14, 97 S.Ct. at 1515 n. 14. In its inquiry into the existence of a contract within the meaning of the contract clause, a federal court must “accord respectful consideration and great weight” to relevant state law, Indiana ex rel. Anderson v. Brand, 303 U.S. 95,100, 58 S.Ct. 443, 446, 82 L.Ed. 685 (1938), although it is not bound by the state’s law of contracts. Irving Trust Co. v. Day, 314 U.S. 556, 561, 62 S.Ct. 398, 401, 86 L.Ed. 452 (1942). See generally Hale, The Supreme Court and the Contract Clause: III, 57 Harv.L.Rev. 852, 852-72 (1944). Accordingly, the appropriate starting point for this court’s examination of the question whether Connecticut’s State Employees Retirement Act created contractual obligations to state employees is the common law of the State of Connecticut. 1. Contractual Obligations in Pension Plans Under Connecticut Law In the leading case of Bird v. Connecticut Power Co., 144 Conn. 456, 133 A.2d 894 (1957), the Connecticut Supreme Court of Errors held that a non-contributory pension plan in which employees were not required to participate created contractual rights enforceable against a private employer. In Bird, the court rejected, in no uncertain terms, the employer’s argument that, as a matter of law, it had complete discretion to modify its employees’ expectations of pension benefits: “A board of directors cannot legally strip an employee of the benefits of a pension plan where the employee has complied with the terms of the offer of a pension, since the purposes of the plan could be readily frustrated at the whim of the directors. . . . Even where an employer declares the plan is within the absolute discretion of the directors, the court will interpret the plan as a whole so as to give effect to its general purpose in securing the loyalty and continued service of the employees, and the employer may not defeat the employees’ reasonable expectations of recovering the promised reward. . . . ” Bird v. Connecticut Power Co., supra, 144 Conn, at 463, 133 A.2d at 897 (citations omitted). In Wyper v. Providence Washington Insurance Co., 533 F.2d 57 (2d Cir. 1976), the court affirmed a decision by Judge Blumenfeld of this court, following Bird and holding that under Connecticut law, “a pension plan creates contractual rights and . . . court review may not be defeated through reservation of discretionary powers in the pension board.” Id. at 63 (footnote omitted). In Wyper, which, like Bird, involved a private employer’s pension plan, Judge Gurfein reiterated the contractual nature of pension rights under Connecticut law: “Later Connecticut opinions citing Bird treat it only as establishing that informal pension plans give rise to contractual rights which cannot be defeated by assertion of discretionary power, and we agree. See Borden v. Skinner Chuck Co., 21 Conn.Supp. 184,150 A.2d 607, 610 ([Super. Ct. Hartford Cty.] 1958); Ellis v. Em-hart Mfg. Co., 150 Conn. 501, 191 A.2d 546, 549 (1963).” 533 F.2d at 63 n.9. If an “informal” pension plan in which employees are not required to participate and to which they contribute nothing of pecuniary value creates a binding contract, it would seem to follow, a fortiori, that a highly structured and formal pension plan—like the State Employees Retirement System—in which the employees must participate and into which they must make monetary contributions gives rise to obligations and rights which are contractual in nature. Further examination of relevant Connecticut cases confirms this impression and strongly suggests that the rationale of Bird, Wyper and the cases cited therein applies with equal force to the facts of this case. In Bird, the court emphasized that the employee “gave up other opportunities for employment because of the security he felt the pension benefits of the defendants afforded him.” Bird v. Connecticut Power Co., supra, 144 Conn, at 462, 133 A.2d at 897. Indeed, the very purpose of the defendants’ offer of a pension was to induce the plaintiff to act as he did; “securing the loyalty and continued service of the employees” was the employer’s goal in offering pension benefits. Id., 144 Conn, at 463, 133 A.2d at 897. Similarly, in Borden v. Skinner Chuck Co., supra, the Superior Court, following Bird, stressed that the offer of a pension-like “bonus” may act not only as an inducement for a prospective employee to accept the offered position, but also as an incentive for one already in the employer’s service to remain in his or her job. If the effect of such a promise is “to induce the employee to refrain from quitting, and in reliance thereon he does refrain, then there is sufficient consideration to support an enforceable contract.” Borden v. Skinner Chuck Co., supra, 21 Conn.Supp. at 190, 150 A.2d at 610. In Bird and its progeny, the Connecticut courts held that an employee who relies upon an offer of deferred benefits to his or her detriment, and to the benefit of the employer who gains the employee’s valuable services and loyalty as a consequence thereof, has expectations which are protected by the law of contracts. The facts in the case at bar demonstrate the existence of precisely this type of reliance. The state has admitted that the plaintiff class consists entirely of persons who either accepted state employment, eschewing otherwise more lucrative job opportunities to work for Connecticut, in reliance upon the promises of pensions contained in pre-1975 law, or who remained in state service, foregoing other employment opportunities, in reliance upon the law as modified by Judge Clarie’s decision in Fitzpatrick. Under the logic of Bird and similar cases decided under Connecticut law, the plaintiffs’ relationships with the state with respect to their expected pensions are contractual in nature. This conclusion is confirmed by the application of basic and long-standing principles of contract law to the admitted facts of the instant case. The common law of contracts clearly protects, in various contexts, the type of reliance interest which, the defendants concede, the plaintiffs possessed prior to the enactment of the 1975 Act. See, e.g., Fisk v. Police Jury of Jefferson, 116 U.S. 131, 133-34, 6 S.Ct. 329, 330, 29 L.Ed. 587 (1885) (implied contract theory protects reliance interest of public officer who performs services on the basis of a promise of a salary level embodied in legislation); Restatement (Second) of Contracts §§ 90 (Tent. Draft No. 2, 1965), 45 (Tent. Draft No. 1, 1964). See generally 1A Corbin on Contracts §§ 193-207 (1963 ed.); Fuller & Perdue, The Reliance Interest in Contract Damages, 46 Yale L.J. 52, 337 (1936-37). Indeed, the courts of Connecticut have been in the forefront of this common law development, conferring the protection of the law of contracts on the reliance interests of promisees in positions like those of the plaintiffs here even before the first Restatement of Contracts was published. In State ex rel. Marsh v. Lum, 95 Conn. 199; 111 A. 190 (1920), the Supreme Court of Errors held that teachers who were promised a salary increase by a school board, and who relied in silence upon that promise, forbearing from exercising their options to leave their jobs, had a contractual right to the increase in pay. In the court’s words, the teachers “gave up something that was legally theirs, and the town has received the benefit of their surrender.” State ex rel. Marsh v. Lum, supra, 95 Conn, at 204, 111 A. at 192. This, the court held, brought the teachers’ case within the rule of Rice v. Almy, 32 Conn. 297, 304 (1864): “[I]f a man by a promise induces the promisee . . . to do some act or part with some chattel, title, interest, privilege, or right, which the law regards as of some value, there is sufficient consideration for the promise.” State ex rel Marsh v. Lum, supra, 95 Conn, at 204, 111 A. at 192. See also Tilbert v. Eagle Lock Co., 116 Conn. 357, 361-62, 165 A. 205, 207 (1933). As in Marsh, the plaintiffs’ forbearance, which in this case was induced by the state’s offer of pension benefits on the terms in effect prior to the 1975 Act, constitutes consideration—even apart from the plaintiffs’ contributions to the State Employees Retirement Fund—for the state’s promise. The contributions which the plaintiffs have made to the State Employees Retirement Fund since becoming state employees further support the conclusion that their relationships with the state are contractual in nature. Standing alone, these payments, which are required as a condition of entering and remaining in state service, constitute consideration under Connecticut law. See, e. g., Osborne v. Locke Steel Chain Co., 153 Conn. 527, 531, 218 A.2d 526, 529 (1966) (defining consideration as “a benefit to the party promising, or a loss or detriment to the party to whom the promise is made”); Finlay v. Swirsky, 103 Conn. 624, 631, 131 A. 420, 423 (1925) (same). This conclusion is in no way affected by the fact that the contributions of employees comprise but a fraction—albeit a substantial one —of the benefits paid out of the retirement fund, for the size of the benefit or detriment which constitutes consideration is irrelevant under Connecticut law. See Osborne v. Locke Steel Chain Co., supra, 153 Conn, at 532, 218 A.2d at 530; Clark v. Sigourney, 17 Conn. 511, 517 (1846); see generally 1 Cor-bin on Contracts § 127 (1963 ed.). Indeed, courts in other jurisdictions have held that the fact that a public employee must make contributions to a pension fund compels a finding that his or her expectations are enforceable contract rights, not mere gratuities. See, e. g., Campbell v. Judges’ Retirement Board, 378 Mich. 169, 179-80, 143 N.W.2d 755, 757 (1966) (state court judges’ pensions); Hickey v. Pension Board, 378 Pa. 300, 305-07, 106 A.2d 233, 235-36 (1954) (city employees’ pensions). 2. Mere “Gratuities” or Contractual Rights? Not surprisingly, the defendants do not question the plaintiffs’ strong reliance interest or the existence of consideration sufficient to support a contract. Nor do they dispute that under Connecticut law the plaintiffs would possess enforceable contractual rights if this case arose in the context of a private employer’s pension plan. Rather, the defendants’ principal argument is that because the state is their employer, the plaintiffs possess mere “gratuities” offered them by a sovereign, rather than rights conferred by contract law. This proposition is, however, supported neither by Connecticut precedent nor logic. No Connecticut court has been called upon to consider whether a public employee’s expectation of pension benefits, like that of the private employee in Bird, is contractual in nature. The only indication that it is possible that the Bird rule might not apply to the case at bar is to be found in ambiguous dicta in an opinion of the Supreme Court of Errors written fifteen years prior to Bird. In State ex rel. Kirby v. Board of Fire Commissioners, 129 Conn. 419, 29 A.2d 452 (1942), the court affirmed a judgment for a retired Hartford fireman who sought a pension which was provided for by the city charter, but which the board administering the pension plan declined to award him. In rejecting one of the board’s arguments, the court wrote: “The defendants further contend that the plaintiff had no vested right to retirement but that his retirement lay in the discretion of the board. It may be true that under retirement acts generally even where the person eligible for retirement has contributed by way of dues or assessments to make up the retirement fund he has no vested right to retirement. That does not mean, however, that a charter provision granting retirement rights may be overridden by a municipal board so as to deprive an employee of his right to retirement as fixed by the charter. . . ” State ex rel. Kirby v. Board of Fire Commissioners, supra, 129 Conn, at 426, 29 A.2d at 455-56 (emphasis added) (citation omitted). Insofar as it might be relevant here, this language is inconclusive. On the one hand, the court suggested that “it may be true,” as a general proposition, that no contractual rights arise from statutory employee pension plans. On the other hand, the court found that the city charter granted the plaintiff “his right to retirement” with the benefits promised by the city; this implies that, at least in some unspecified circumstances, public employees may have contractual rights to pensions provided by law. To the limited extent that the ambiguous Kirby dicta do appear to support the defendants’ argument that a state pension is merely a “gratuity,” such language is of highly uncertain precedential value after Bird v. Connecticut Power Co., supra. The contention of the defendants in Kirby that a pension board has complete discretion to deprive an employee of the pension which he expected under the terms of the board’s earlier offer was not squarely addressed by the court in that case. However, this notion was expressly rejected, at least as applied to the private sector, in Bird, where the court gave no indication that its holding should be limited to cases involving private employers’ pension offers. See Bird v. Connecticut Power Co., supra, 144 Conn, at 463, 133 A.2d at 897. In the absence of Connecticut precedent which is directly on point, the defendants urge that the Bird rule should not be applied to this case, and instead refer the court to a line of cases from other jurisdictions which hold that public employees’ pensions are “gratuities.” However, the court finds the logic of these cases to be anything but compelling. To follow these authorities would require the court to hold that a pension is a “gratuity” if offered by the state, even though the same pension would undoubtedly give rise to contractual rights under Connecticut law if it were offered by a private employer under like circumstances. In support of this distinction, the defendants rely entirely on the fact that the state, unlike a private employer, possesses attributes of sovereignty. While Connecticut’s sovereignty is undeniable, so is its ability to enter into binding contracts to procure the services which it requires to function on a daily basis. See United States Trust Co. v. New Jersey, supra, 431 U.S. at 24, 97 S.Ct. at 1519 (a state’s “power to enter into effective financial contracts cannot be questioned”). The fact that in our constitutional system, the state possesses a measure of sovereignty in no way supports the conclusion that its offer of pension benefits to its employees is gratuitous rather than contractual. See Cohn, Public Employee Retirement Plans— The Nature of the Employees’ Rights, 1968 U. of Ill.L.Forum 32, 37. Another difficulty with the notion that the pensions offered by Connecticut are “gratuities” is to be found in the state’s own constitution. Article 11, section 2 of the Connecticut Constitution provides: § 2. Extra compensation to public officers prohibited Neither the general assembly nor any county, city, borough, town or school district shall have power to pay or grant any extra compensation to any public officer, employee, agent or servant, or increase the compensation of any public officer or employee, to take effect during the continuance in office of any person whose salary might be increased thereby, or increase the pay or compensation of any public contractor above the amount specified in the contract. This provision, which dates to the nineteenth century, prohibits the legislature from bestowing “extra compensation” or gratuities on the state’s employees. “[T]he purpose of the article [is] to take from the public bodies therein mentioned . the power to make gratuitous compensation to public officers and employees in addition to that which is established by law or contract . . . Sullivan v. City of Bridgeport, 81 Conn. 660, 665, 71 A. 906,907 (1909) (ordinance increasing police officers’ salaries did not confer an unconstitutional gratuity). See also State ex rel. Marsh v. Lum, supra, 95 Conn, at 205-206, 111 A. at 192 (school board’s grant of a pay increase to teachers was a contract, not a gratuity barred by the state constitution); McGovern v. Mitchell, ,78 Conn. 536, 569, 63 A. 433, 446 (1906). Through Article 11, section 2, the sovereign people of Connecticut expressly denied the legislature the power to make gratuitous payments to state employees—the very power which the defendants now misguidedly argue the legislature exercised when it passed the State Employees Retirement Act. The court declines to find that the General Assembly exceeded its constitutional authority when, in 1939, it enacted the state’s comprehensive public employee retirement laws. Rather, the court concludes that the State Employees Retirement Act was in fact designed to achieve the proper legislative purpose of providing a form of deferred compensation to qualified state employees as an incentive for them to enter into, and remain in, state service. See Alcorn ex rel. Hyde v. Dowe, 10 Conn.Supp. 346, 350 (Super.Ct. Hartford Cty.), rev’d on other grounds sub nom. State ex rel. Hyde v. Dowe, 129 Conn. 266, 28 A.2d 12 (1942) (“the fundamental theory of the Act is that those who have rendered long and faithful service to the State shall be compensated after they retire”). Because Connecticut’s sovereignty does not compel a finding that the nature of the plaintiffs’ expectations differs from those of similarly situated employees in the private sector in any legally significant way, the court finds the Bird rationale applicable to the case at bar. This result is supported by the trend of cases in other states holding that, at least where employees contribute to the pension fund (as Connecticut’s employees are required to do), a public pension plan is not a gratuity, but rather gives rise to binding contractual rights and obligations. See, e. g., In re State Employees’ Pension Plan, 364 A.2d 1228 (Del.1976); Miles v. Tennessee Consolidated Retirement System, 548 S.W.2d 299 (Tenn.1976); Pyle v. Webb, 253 Ark. 940, 489 S.W.2d 796 (1973); Sylvestre v. State, 298 Minn. 142, 214 N.W.2d 658 (1973); Smith v. City of Dothan, 279 Ala. 571, 188 So.2d 532 (1966); Yeazell v. Copins, 98 Ariz. 109, 402 P.2d 541 (1965); Police Pension & Relief Board v. Bills, 148 Colo. 383, 366 P.2d 581 (1961); State Teachers’ Retirement Board v. Giessel, 12 Wis.2d 5, 106 N.W.2d 301 (1960); Eisenbacher v. City of Tacoma, 53 Wash.2d 280, 333 P.2d 642 (1958); Wright v. Retirement Board, 390 Pa. 75,134 A.2d 231 (1957); Wallace v. City of Fresno, 42 Cal.2d 180,265 P.2d 884 (1954); Tait v. Freeman, 74 S.D. 620, 57 N.W.2d 520 (1953); Payne v. Board of Trustees, 76 N.D. 278, 35 N.W.2d 553 (1948). The numerous courts which have rejected the archaic notion that public employees’ pensions are merely gratuities which may be revoked or significantly modified at the whim of the legislature have recognized that one who is offered a pension by the state as an inducement to join and remain in the state’s employ is in precisely the same position as one, such as the plaintiff in Bird, who is offered a similar pension for the same reasons by a private employer. In both instances, the offered pension is a form of deferred compensation upon which the employee makes his or her decision to accept and continue in a job. See Wright v. Retirement Board, supra, 390 Pa. at 79, 134 A.2d at 233. In both cases, the employer and employee each give up something of value: the employer makes a promise to pay compensation in the future, and the employee forbears from accepting other employment. In both cases, each obtains something of value: the employee gains an expectation of deferred compensation upon retirement, while the employer receives valuable services and, perhaps, a measure of loyalty from the employee. See Yeazell v. Copins, supra, 98 Ariz. at 114-15, 402 P.2d at 543. The contractual nature of modern contributory public employee pension plans, and their similarity to private pension plans, was placed in historical perspective by the Supreme Court of Delaware in holding that the “gratuity” doctrine no longer comports with modern realities: “Originally a pension was a gratuity usually offered to a retiring officer or executive of a company to show the company’s appreciation for past services rendered. Those first pension systems were non-contributory and, although a person might have expected to receive a pension, the recipient usually did not accept employment or continue therein in reliance upon the expectation of a pension. As time and the nature of employment relationships passed, employers—even governments—found it necessary as a matter of competition to offer a pension plan benefit as an inducement for the hire or retention of employees. Indeed, in today’s economy, the terms and conditions of an employer’s pension plan play an important role in inducing a man to enter or continue in the service of that employer. In other words, it is a part of the consideration for the contract of hire.” Dorsey v. State ex rel. Mulrine, 301 A.2d 516, 518 (Del.1972) (emphasis added). See also Hickey v. Pension Board, 378 Pa. 300, 30A-05, 106 A.2d 233, 235-36 (1954). As noted at greater length previously, the facts of this case demonstrate the contractual nature of the relationship between the state and the plaintiffs. Following the trend of better-reasoned modern cases from other jurisdictions, and consistently with Connecticut contract law and the rationale of the opinion of the Connecticut Supreme Court of Errors in Bird, the court holds that the enactment of the State Employees Retirement Act gave rise to contractual rights and obligations which are cognizable under the contract clause of the United States Constitution. In so holding, the court does not denigrate the sovereignty of the State of Connecticut. While the state’s sovereignty is irrelevant to the existence of a contract, it is an important factor in determining whether any contractual obligation of the state has been unconstitutionally impaired. The court duly considers questions of state sovereignty in determining the constitutionality of the claimed impairment of Connecticut’s contractual obligations. 3. The Content of the Plaintiffs’ Contractual Rights and Connecticut’s Obligations The content of the plaintiffs’ contractual rights and Connecticut’s obligations, to the ex