NFL Postretirement

Plans

Jackie CullinanJennifer HaddadAndrew ShinKaren Wang

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 $2501982-1992 $2551993-1994 $2651995-1996 $3151997 $3651998-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

Questions?