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Discussion Topics
NFL pension plan today as compared to the NBA and MLB
NFL retirement plan history
Issues with the retirement plan Lack of representation Conflict of interest
League Stats Compared
NFL brought in $7.1 million in 2007 NBA: $3.6 billion MLB: $4.3 billion
Average NFL career is 3.5 seasons NBA: 4.82 seasons MLB: 5.6 years
Average NFL player salary is $1.1 million per year NBA: $4 million per year MLB: $2.8 million per year
Pension Plans Compared
Vested in NFL plan in 3 seasons NBA: 3 seasons MLB:
Retirement Benefits in 43 days Medical Benefits in 1 day
NRA for NFL pension plan is 55 years old NBA: 50 years old MLB: 62 year old, pro-rated
Average NFL pension payout is $12,165 per year NBA: $19,000 per year MLB: $36,700 per year
Brief NFL Benefit History 1959 – First NFL pension plan
Changes result from negotiations between the NFLPA and NFL Management Council Until 1993 CBA, changes were insignificant Ex – 1982 CBA increased benefit credits by $5 per
month, per credited season
The result: Modest salaries and negligible retirement benefits left players with little savings. The nature of football and lack of medical benefits left retirees with medical issues and bills that they had to cover themselves.
NFL Benefit Funding
A portion of NFL’s total revenues are allocated to players annually Active players’ salaries Active and inactive players’ benefits
Thus, as league revenues increase, funding can increase
The issue: Former players complain that they made the game what it is today, and today’s players are reaping the benefits
1993 CBA – A Year of Change
Guarantee of over $1billion in pension, post-career, and health benefits for current and retired players
Retroactive pension increases 30% for pre-59ers and 40% post-59ers
Decrease in vesting requirements From four credited seasons to three
1993 CBA (continued)
Establishment of new programs Retiree Medical Benefits Second Career Savings Plan – 401(k) Total and Permanent Disability Benefits
Selection of overseers for post-retirement plan Plan Counsel – Groom Law Group Plan Actuary – Aon Consulting
1998 CBA
Extended 1993 CBA through 2003
Established annuity plan
Increased lowest benefit credit From $80 to $100 per month, per credited
season
Increased T&P disability benefit
Changed pension eligibility requirements From five seasons to four
2002 CBA
Extended 1998 CBA
Increased lowest benefit credit From $100 to $200 per month, per credited
season
2006 CBA Extended 2002 CBA through 2012
Tripled widows’ and surviving children’s benefits
Established Plan 88
Increased monthly pension amount of those who played 1983-2006 by 10%
Increased portion of revenues to playersLeague Season Percentage
2006, 2007 57%
2008, 2009 57.5%
2010, 2011 58%
2006 CBA (continued)
Increased lowest benefit credit Post-retirement, active and inactive players
must receive at least the following per month, per credited season
Credited Season
Benefit Credit
Before 1982 $250
1982-1992 $255
1993-1994 $265
1995-1996 $315
1997 $365
1998-present $470
Improvements Since 2006
2007 – Established benefits and programs Health Reimbursement Account Plan Cardiovascular Health Program NFL Player Joint Replacement Benefit Plan Provided assistance with living arrangements
2008 Provided additional medical assistance Announced changes to T&P and LOD disability
benefits
Criticisms of the NFL Pension Plan
Conflicts of Interest Actuary Retirement Board
Lack of representation
Conflicts of Interest - Actuary
Actuaries determine the necessary contributions by NFL owners to fully fund retirement plans.
Actuarial for NFL - Aon Consulting
Aon Consulting founder and Board of Director member are 20% owners of the Chicago Bears
Conflicts of Interest
Disability Benefits Only 2% receive disability benefits
Eligibility Cannot receive retirement benefits before NRA “Total and Permanently Disabled”
Conflict of Interest – Retirement Board
Is the player “totally and permanently disabled?”
Determined by …
1) Neutral physician, Appointed by the Retirement Board
2) Reviewed by two-person Disability Initial Claims Committee.
3) Appeal process: Retirement Board Medical Advisory Physician
Conflict of Interest
Problem?
Retirement Board is 6 members 3 - NFL Management Council 3 – NFLPA
BUT NFLPA delegated positions to Aon Consulting
Karen
Conflict of Interest – Retirement Board
Is the player “totally and permanently disabled?”
Determined by …
1) Neutral physician, Appointed by the Retirement Board
2) Reviewed by two-person Disability Initial Claims Committee.
3) Appeal process: Retirement Board Medical Advisory Physician
Problem affects these areas
Lack of Representation
Comparison NBA gave pre-1965 players an 50% increase in
benefits NFL gave pre-1982 a 25% increase in benefits and
post-1982 a 10% increase
Executive Director of NBPA, Billy Hunter: “This is an important gesture and a tangible
benefit for the pioneers of our league”
Former NFLPA executive director, Gene Upshaw hada different focus “The bottom line is I don't work for them. They can
complain about me all day long … But the active players have the vote. That's who pays my salary.”
Lack of Representation
Gene Upshaw was primarily concerned with helping current players during his tenure despite being a former player Former players were getting less pension Fewer older players are even eligible NFL was not the multi-billion dollar industry it is today Today, the NFL spreads the knowledge of saving and
retirement to its rookies Results in many former players going homeless
What’s Being Done?
Mike Webster, a Hall of Fame center who played for the Pittsburgh Steelers died in 2002 Was homeless at the time Suffered from mental illnesses attributed from
concussions during his playing days
Many players take out their pensions early – meaning they receive even less money
Concussions and a variety of other injuries can cause permanent long-term damage Many former players rely solely on their pension checks
as income – making them below poverty level
What’s Being Done?
While pension and other benefits have increased in recent years, it is still not enough
Several former players and organizations have established organizations or websites Dignity after Football, Inc. Fourth & Goal Gridiron Greats Hall of Fame Enshrine Assistance Fund Hall of Fame Players Association The John Mackey Fund, Inc.
What’s Being Done?
In 2007, Kyle Turley donated his game check to Gridiron Greats Turley is quoted, in a New York Times article, as
saying: “Are we going to wait until guys die? Are we going to wait until guys commit suicide before we make a difference and change this thing?”
Other players have taken similar steps in helping older, retirees
Additionally, former pro athletes Charles Barkley and John McEnroe have also made sizable contributions
What’s Being Done?
Mike Ditka asked each NFL team to donate 100k to help older retirees Some teams sent in a measly $5,000 check
Older players are often forgotten despite their efforts into making the league what it is today
Better playing conditions today for athletes Injury treatment, etc