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June 26, 1990


John A. Nordberg, United States District Judge.

The opinion of the court was delivered by: NORDBERG


 Upon retiring in 1983, Benjamin C. Homola became disquieted that, whatever advantages his sex were thought to have given him in life, his monthly pension payments would not be among them. His employer of thirty years, the First National Bank of Chicago ("the Bank"), like many employers of a bygone era, had once permitted women to retire at a younger age -- and so accumulate pension benefits at a faster rate -- than similarly situated men. The Bank gradually eliminated these differences in response to Supreme Court decisions and Equal Employment Opportunity Commission opinions holding that men and women must be treated identically with respect to their earning and receipt of pensions. But the Bank has steadfastly refused to alter the rate at which it credited pension benefits to men and women before the effective date of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq.

 This case was filed by the EEOC on behalf of Homola and other men who worked for the Bank before July 2, 1965, the date Title VII took effect, and who retired thereafter. It alleges a violation of Title VII § 703(a)(1), 42 U.S.C. § 2000e-2(a)(1), and the Equal Pay Act ("EPA"), 29 U.S.C. § 206(d). Both sides have moved for summary judgment pursuant to Fed. R. Civ. P. 56, and their positions have been generously briefed. Because the material facts are not genuinely disputed, the Court may grant judgment as a matter of law. Weihaupt v. American Medical Ass'n, 874 F.2d 419, 424 (7th Cir. 1989). Because it does so in favor of the Bank, the Court has drawn all reasonable inferences in favor of the EEOC. See Spring v. Sheboygan Area School District, 865 F.2d 883, 886 (7th Cir. 1989).


 The EEOC filed this case in May 1988, based on a charge filed with the Commission by Homola shortly after his retirement from the Bank as a vice president on February 1, 1983. In his charge, Homola, a lawyer, had protested the Bank's use of a pension benefit formula that gave him a lower benefit than he would have received had he been a woman. Homola's right to a pension was governed by the Bank's pension plan as restated on January 1, 1980. Pl. 12(1) Statement para. 25. This plan was successor to a series of plans, as amended and restated through the years. For purposes of this motion, the plan as restated in 1980 will be called "the current plan."

 The sex-based formula in the current plan has its root in pre-Title VII history. Before 1950, the Bank determined men and women's pensions the same way. Pl. 12(1) Statement para. 9. Starting in 1950, the Bank decided that men would earn credit toward their pension at a rate of 2% of their credited annual compensation up to a maximum of thirty-five years. Pl. 12(1) Statement para. 9; Def. 12(1) Statement para. 3. Women, however, would earn credit at 2.5% of their credited annual compensation up to a maximum of twenty-eight years. Id. The maximum annual pension for both men and women was thus 70% of credited salary. Id. The difference in crediting rates coincided with a sex-based difference in early retirement ages -- age 55 for women and age 60 for men. Def. 12(1) Statement para. 3. *fn1"

 Title VII became effective on July 2, 1965. By a letter dated September 13, 1968, the General Counsel of the EEOC opined that, though early retirement ages favoring women were discriminatory toward men, existing retirement ages could be gradually equalized to avoid hardship. Def. 12(1) Statement para. 5 & Ex. 3. Effective January 1, 1971, the Bank amended its pension plan to phase out the earlier retirement age for women. Def. 12(1) Statement para. 5. A corresponding amendment provided that men and women would earn pension credits at a uniform rate of 2% per year for each year of service after 1970. Id. By subsequent amendment in 1976, the bank revised the pension plan to equalize the pension credit rate for men and women at 2.5% per year for the years between July 2, 1965 (the effective date of Title VII), and December 31, 1970. Def. 12(1) Statement para. 7.

 Thus, under the Bank's current plan, which governs Homola's pension rights, women were credited with 2.5% of their credited compensation for each year of service before July 2, 1965, while men were credited with only 2% of their credited compensation for these years. Thereafter, men and women were treated identically, receiving credit at a rate of 2.5% per year of service from July 2, 1965, through December 30, 1970, and 2% per year of service beginning January 1, 1971. Pl. 12(1) Statement para. 23.

 The Bank's current plan is a defined benefit plan. Def. 12(1) Statement para. 8. Compare Pl. 12(m) Statement para. 8. "[A] defined benefit plan is a plan that defines a projected benefit and then funds that benefit either by actuarial methods or by purchasing insurance or annuity contracts." R. Osgood, The Law of Pensions and Profit-Sharing § 2.3, at 46 (1984). As pointed out by Donald Hoy, the Bank's employee benefits manager, "Whether and to what extent an employer contribution is needed to fund the Plan is determined annually by the Bank's actuaries." Hoy Aff. para. 10. According to Hoy's uncontradicted affidavit, the process is as follows:

 Id. (emphasis supplied). See also Jolls Aff. paras. 4-5. By the term "accrual rate," Hoy means the annual crediting of either 2% or 2.5% of credited compensation toward an individual's pension. Def. 12(1) Statement para. 2. The EEOC quarrels with the use of the term accrual. Pl. 12(m) Statement para. 2. "Instead," the EEOC contends, "the formulas calculating pension benefits takes into account years of participation in the plan." Nevertheless, the EEOC has not put forward evidence to challenge Hoy's sworn statement that the Bank's actuaries currently take into account the "differential accrual rates" in determining whether additional contributions are necessary to fund the promised benefits. Accord Jolls Aff. para. 5.

 All agree that the Bank has been successful so far in managing the pension plan fund -- so successful, in fact, that the plan has for the past twenty years needed no additional contributions by the Bank or by the plan participants. Before 1970, the Bank contributed to the fund a fixed percentage of each participant's salary, regardless of sex. Pl. 12(1) Statement para. 2. This contribution declined from an initial high of 12% of each participant's salary in the early 1950s, to 10% in the late 1950s or 1960, to 5% in 1965, and finally to no contributions since 1969. Id. & id. P 11. Similarly, before 1971, participants contributed 2% of their annual salary, regardless of sex, by means of monthly payroll deductions made by the Bank. Pl. 12(1) Statement para. 1. By resolution dated December 23, 1970, the pension plan executive committee abolished employee contributions beginning in 1971 and ordered a refund of contributions (with interest) previously made by participants who had not yet retired. Pl. 12(1) Statement para. 10.


 The EEOC's theories under Title VII and the EPA are basically the same, but due to the peculiarities of each statute, the relief sought under each varies. Common to both is a demand that the Bank amend its plans to eliminate all sex-based disparities in the future. As for monetary relief, under Title VII the EEOC seeks back benefits with respect to pension payments made after April 18, 1981 -- two years before Homola filed his charge with the Commission. See 42 U.S.C. § 2000e-5(g). Under the EPA, the EEOC seeks back benefits with respect to pension payments made after May 2, 1986 -- two years before this suit was filed. See 29 U.S.C. § 255(a). The EEOC also argues that the reduction of the pension crediting rate for women to 2% from 2.5% beginning in 1971 broke the EPA rule against lowering the wage rate of the favored sex in order to remedy a violation. See 29 U.S.C. § 206(d). It seeks relief with regard to pension benefits paid to women after May 2, 1986.

 Because the law of liability with respect to Title VII is most developed, and thus overshadows analysis under the EPA (see Patkus v. Sangamon-Cass Consortium, 769 F.2d 1251, 1260 n. 5 (7th Cir. 1985)), the Court will discuss it first.

 A. Title VII

 1. Timeliness of the Charge

 A prerequisite to suit under Title VII is that the aggrieved party file a timely charge with the Commission. 42 U.S.C. § 2000e-5(e); Schnellbaecher v. Baskin Clothing Co., 887 F.2d 124, 126 (7th Cir. 1989). In Illinois, a so-called "deferral state," a charge must be filed at least within 300 days of an alleged violation. Gilardi v. Schroeder, 833 F.2d 1226, 1229-30 (7th Cir. 1987); Malhotra v. Cotter & Co., 885 F.2d 1305, 1308 (7th Cir. 1989). The Bank argues that its retroactive cure of pension crediting disparities for years after July 2, 1965, means that the 300-day statute of ...

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