Request By:
Honorable David A. Lanphear
Attorney at Law
P.O. Box 1867
Bowling Green, Kentucky 42101
Opinion
Opinion By: Steven L. Beshear, Attorney General; By: Walter C. Herdman, Assistant Deputy Attorney General
This is in response to your letter of April 22, in which you, on behalf of the Policemen's and Firefighter's Retirement Fund of the City of Bowling Green seek an opinion concerning the use of such fund for the payment of health insurance benefits to certain members of the police and fire departments. More specifically you relate that the board of trustees of the pension fund desire to provide health insurance benefits for members only, thereby excluding dependants, and further that the benefits are to be extended only to those members whose total family income falls below a certain level as, for example, the income level which qualifies one for food stamps. Under the circumstances you raise the following questions:
"1. May the Retirement Fund legally provide health insurance benefits for the recipients of the funds as described above?
2. Should the Retirement Fund (or the City should it subsequently decide to do so) provide this health insurance benefit as described above, would it violate the equal protection clause if the benefit were extended only to those whose total family income did not exceed a certain level?"
We assume that the retirement fund of the police and firefighters of the City of Bowling Green is being operated under the provisions of KRS 95.851 to KRS 95.991 governing cities of the second class. The purpose of the retirement fund under KRS 95.853 is to provide retirement annuities and disability benefits for members of the police and fire departments who become aged or otherwise incapacitated, and widow's annuities and other benefits to the dependents of such members. The duties of the board of trustees as outlined in KRS 95.871 coincide with the purpose to which the fund is directed under KRS 95.853. Thus, pension funds for police and firefighters cannot be used for any purpose other than those previously mentioned in the related statutes and therefore cannot be utilized to provide health insurance benefits for the members of the departments. We might also call your attention to the case of Police and Firemen's Retirement Fund v. Shields, Ky., 521 S.W.2d 82 (1975) in which the Court declared that the rights of persons participating in a pension plan system are governed entirely by the terms of the statute under which it is operated.
On the other hand, the City of Bowling Green is authorized to establish hospitalization benefits for all employees and their immediate families under the terms of KRS 79.080(2). KRS 82.030 and KRS 82.040, also authorizing such benefits, were repealed in 1980. The terms of KRS 79.080 authorizing the coverage of city employees do not, however, authorize the exclusion of a group of its employees for any reason, much less one based upon the total family income of the individual employee that is completely unrelated to his public employment duties. Such would no doubt be considered discriminatory and create an arbitrary classification in violation of Section 3 of our Constitution and the Equal Protection Clause of the Fourteenth Amendment of the federal Constitution. Thus, the city must either elect to provide hospitalization coverage for all of its police and firefighters or none. It does have the option of covering the families of such employees under the terms of the referred to statute.