The NFL Pension and Disability Plan

In the mid-1950s, the NFL Players Association began to consider the question of insurance, pension and disability benefits. The owners resisted, but in response to the NFLPA’s threat to sue the league on anti-trust laws, they eventually established medical and life insurance and retirement plans beginning in 1959. The original retirement plan went in to effect in 1961 and has covered every eligible player from 1920 on.  To be eligible, a player only has to play 3 seasons after 1992, or 4 seasons before 1992. It also included players on the active roster for 3 games or on the IR. The name for it was The Bert Bell Plan. Later on, it merged with The Pete Rozelle NFL Retirement Plan. There are other benefits for disability for those whose injuries forced immediate retirement. Two years ago, an addition known as "The 88 Plan" was created, to aid retirees with brain-related injuries with additional medical coverage.

How it works: The retirement plan is based on benefit credits, tied to length of NFL experience. Players who retired before 1982 are entitled to pensions based on a credit of $200 per season played. Annual payments range from $3,000 to $5,640 per year of service, depending on the season. Players in 1981 or earlier receive $3,000 per season; players in 1998 or later receive $5,640 per year of service. An annuity was added in 1998.

Example:
1980's Players: A 10-year veteran who retired in 1981 or earlier receives an annual payment of $30,000.

That monthly payout, based on the number of seasons played, does not amount to millions. For example, a veteran like Darrell Green, who retired in 2002 after 20 seasons, will only be looking at $5,805 per month. Approximately $70,000 per year or $290 a month for each season played.

And despite the fact that the total pension fund was raised to $40 million annually in 2002, there are still disputes over payouts. In May 2004, the estate of Mike Webster began the legal process to sue the NFL's retirement and disability plans over his pension. Webster, who died in 2002, allegedly suffered brain damage while playing in the NFL. With his 1999 request for full disability benefits rejected, he ended up in debt and homeless for a short time. In 2005 his estate received full retroactive benefits, which amounted to $1.18 million plus interest and fees, dating back to 1991. The NFL appealed, but in 2006 the U.S. Court of Appeals backed the ruling of the original federal judge.

In its nearly 50-year history, The Bert Bell/Pete Rozelle NFL Player Retirement Plan has provided retirement, disability and related benefits to eligible players, their widows and surviving children. Benefits were continued and increased under Collective Bargaining Agreement's in 1970, 1977 and 1982. The plan was further enhanced under the landmark 1993 CBA and its subsequent extension agreements in 1996, 1998, 2002 and 2006.

Vesting occurred upon completion of 5 credited seasons (beginning with 1959), and the normal retirement age was 65.

Bert Bell died in 1959 but left behind a plan that would be completely owner-controlled with no guaranteed funding and no player representation on the Retirement Board for years. Board members were appointed by then-Commissioner Pete Rozelle, who was immediately elected as chairman of the board. Chairman Rozelle then decided that, for convenience, he would act as secretary of the Retirement Board and that the principal office for Retirement Board business would be the league office.

That made things decidedly one-sided. In essence, the clubs could vote to discontinue or suspend contributions or even terminate the plan at any time without liability, and the players had no say in the matter.

In 1964, the owners decided to make changes to the plan, such as leveling the club contribution to the plan (per IRS rules at the time) and including seasons prior to 1959 in the vesting of those players who played in and after 1959. The owners also amended the plan so that the owners and the league would be under no obligation to continue contributions or maintain the plan. The first player trustees, Charles Bradshaw and William Howton, were not appointed to the board until several years after the plan was established.

Note:As currently constructed, the board has no retired players or independent medical personnel involved in the claim decision process. The board is comprised of current players and NFL personnel, and is chosen by the NFL.

By 1965, there were 118 former players eligible for pension benefits. The plan was amended to expand the board to 5 members: two players, two owners and the NFL Commissioner. Now that the players had a voice in the plan, they began to suggest and bargain for changes. During the 1970s, several changes to the plan occurred:

* Normal Retirement age was reduced to 55;

* Line-of-Duty disability benefit was established in 1971, a first-of-its-kind benefit for partial, but career-ending disabilities;

* Benefit Credit amount was set at $60 each for Credited Seasons 1959-1965, with higher amounts in later years;

* Early Retirement Benefit at age 45, Early Payment Benefit (25 percent lump-sum) and the Social Security Adjustment option were introduced.

The 1980s were trying times for the plan. The 1982 CBA fixed contributions and benefits and increased pension credit for seasons 1970 and beyond. However,  the board was deadlocked by 1986 over the owners’ refusal to make plan contributions and increase benefits. This resulted in the trustees suing each other.

Then things got worse. After the NFLPA de-certified, the owners terminated the Bert Bell Plan and created a new owner-controlled, Pete Rozelle NFL Player Retirement Plan.

In 1993 the NFLPA and NFL entered into a new collective bargaining agreement, and a new era of NFL player benefits was born. As part of the agreement, the two plans merged to form the Bert Bell/Pete Rozelle NFL Player Retirement Plan. The contribution lawsuit was settled with a 40 percent increase in past service credit. For the first time, disability benefits expanded to include a football degenerative category of total and permanent disability and players who started the plan, the pre-59ers, were finally included. Other major improvements to 1993 CBA and each extension agreement include:

* Continual increases in pension and disability benefits, including retroactive increases for past players;

* Decrease of vesting requirement to three credited seasons for players with a season after 1992; and to four credited seasons for players without a season after 1992;

* Inclusion of World War II, Korean War and Vietnam years for pension eligibility;

* Doubling of Line-of Duty disability benefit; the duration of the benefit and time frame for applying were also increased;

* Tripling of widow’s and surviving children’s death benefit.

The Players Association also negotiated a 401(k) plan in 1993 (also common in other sports), in which teams put in $2 for every $1 a player contributes. And an annuity was added in 1998, from which a 10-year veteran could earn more than $100,000 annually.

In 2006, pensions of retired players were increased 25 percent for the amounts earned before 1982 and 10 percent for amounts earned in 1982 and later. The minimum increase was $50 per month. Full benefits are available at the age of 55, with a minimum payout of $200 a month for each season played in the NFL.

Example:
2007 Players: A 10-year veteran who retires now will receive an annual pension payment of $56,400 (at age 55), plus potentially more than $100,000 annually from his annuity.

The improvements are part of the recently extended CBA and will cost approximately $120 million per year. That will raise the annual cost of player benefits to $700 million a year. Retired players now receive nearly $60 million a year from the retirement plan. Three other funds provide more than $1 million a year in financial assistance to retired NFL players in need.

Pensions of retired players were increased 25 percent for amounts earned before 1982 and by 10 percent for amounts earned in 1982 and later. The minimum increase for retired players will be $50 per month. Benefits were tripled for the survivors of a player who dies before his retirement benefits begin.

There also are provisions for paying tuition expenses for retired players; a 401K savings plan; annuity programs; insurance; severance pay; and disability benefits. Moreover, the post-retirement life of a NFL player is full of non-physical challenges. According to the Kansas City Star, two-thirds of players have "emotional problems" within 6 months of retirement. And 80 percent of their marriages end within 4 years – another huge financial drain.

The NFL now works with current players about preparing for life after football, understanding that many players arrive from coddling college programs where there was little actual education and few thoughts spent on anything but playing ball.

There are programs in place that never existed years and years ago to help prepare players for their transition. The rookie symposium informs about all of the resources that exist to assist them in their life off the field including continuing education, internships, life skill programs.

But that is too late for the older players who often mismanaged parts of their lives. Ones such as Herb Adderley, who was one of 324 former players including 40 Hall of Famers who (foolishly, he admits) took early retirement, which explains his pathetically low pension. Not that it would have been much better. Jerry Kramer, who retired in 1968, gets just $358 per month.

Matt Bouza, a onetime wide receiver at Cal, played 7 years in the NFL and retired in 1989. His annual pension will be less than $22,000 if he begins collecting at 55, the NFL's designated retirement age. The amount will increase to about $41,000 if Bouza waits until he's 62.

Today’s plan has come a long way since its inception. It has been the cornerstone of the NFL Player Benefits package for many years. Progress has been made over the years in improving the Bell/Rozelle plan as well as the benefits package as a whole. In fact, the Bert Bell/Pete Rozelle NFL Player Retirement Plan now holds nearly $800 million in assets and pays out $6.5 million in pension, disability, widow’s and surviving children’s benefits each month. The Supplemental Disability Plan pays an additional $10 million in benefits to disabled players each year. Base pension and disability benefits have increased tremendously, and changes in eligibility requirements have opened the plan to more and more players who were previously not included.

Player payouts in the NFL pension program comes solely from television revenue invested by the league. Those programs are designed to be safety nets for players who didn't earn large salaries or have long careers. The NFL's plan covers every player who played at least 4 seasons in the league. The benefits change does not affect the players’ pensions, which are managed by the union, or the pensions of league office executives. Any change to player benefits must be negotiated between the NFL Players Association and the NFL, since NFL players are unionized.

THE 88 PLAN

Much of the criticism aimed at the NFL centers on the absence of medical coverage for former players, a huge problem given football's lingering physical toll. The league and Players Association finally acknowledged one aspect of the problem, recently adopting the "88 plan." Beginning in 2007, players retired under the pension plan will have some coverage for dementia, including Alzheimer's disease, regardless of their age when care becomes necessary. "88" is the number of Hall of Fame TE John Mackey, one of the first former players who qualified. His wife, Sylvia, was instrumental in persuading former NFLPA Director Gene Upshaw and former NFL Commissioner Paul Tagliabue to include aid for dementia in the new contract.

The NFL Players Association and the NFL Management Council created The 88 plan to assist players who have been diagnosed with dementia and are vested in the Bert Bell/Pete Rozelle NFL Player Retirement Plan.  It was created on February 1, 2007 to provide increased financial benefit to players demonstrating dementia or other brain-related ailments, including Alzheimer’s. It is the first program of its kind in this country. The program provides up to $88,000 per year to retired players placed in an in-treatment facility managing their care. This money is meant to relieve the burden placed on the families of retirees suffering from crippling mental afflictions related to their football careers. Additionally, up to $50,000 can be awarded to players suffering from similar head trauma injuries but who are cared for in their home rather than in an in-treatment facility. The nature of head trauma generally requires "all hands on deck" and around-the-clock care. Accordingly, money from the "88" Plan provides financial protection to families often in need of their income earning potential.

Already well over $1 million has been distributed to suffering players and their families through this benefit. When the plan took effect Feb. 1, 2007, 35 retired players had been approved for aid, with 19 more applications pending. At that time, the league and union were going by "word of mouth" in identifying players.
Now the identification process is being done through the Bert Bell retirement fund, which handles pensions for more than 9,000 retired players. The money is coming from a trust fund administered by the league and union. So far, according to the NFL, 103 potential candidates for aid have been identified. There are 54 applications, and no one has been turned down. The applications of 19 players who have not yet been certified are to be reviewed.

NFL and union officials say the correlation between NFL players and Alzheimer's is anecdotal rather than scientific, and experts in the field agree. But the heightened interest in the subject follows the death of Andre Waters, who committed suicide in 2006 at age 44. Reports concluded he had brain damage that resulted from multiple concussions during 12 years as an NFL safety.

In addition, The Boston Globe and The New York Times reported in 2007 that 34-year-old Ted Johnson, who spent 10 years as a LB with the New England Patriots, shows early signs of Alzheimer's.

Under the program, players can receive up to $50,000 a year for home care and up to $88,000 if they are institutionalized. That’s an ignored part of the burden of Alzheimer's -- those with dementia or Alzheimer's need full-time care, and spouses or children must quit jobs to give full-time care.

Sylvia Mackey never imagined that a heartfelt letter she wrote would be a factor in the creation of a new benefit to help players suffering from dementia. She simply wanted to tell her husband John’s story and ask for help. Like many other former players, Mackey suffers from dementia. Today, Plan 88 pays for a caregiver for Mackey, which means Sylvia can go to work knowing her husband is in safe hands. Without the plan’s assistance Sylvia would have likely needed to leave her job and stay home to care for her husband—a challenging task, even for skilled caregivers.

Mackey, 67, was a revolutionary NFL player. Only the second TE to be inducted into the Hall of Fame, the 6’2" Syracuse University standout was drafted by the Baltimore Colts in 1963. He played nine seasons in Baltimore and finished his 10-year career with the San Diego Chargers. Known for his breakaway speed, strong blocking and ability to avoid tackles, Mackey played in two Super Bowls and five Pro Bowls, and he was named the NFL’s all-League TE three years in a row. He was the first president of the NFLPA and had a tremendous impact on the NFL’s labor structure.

According to the Alzheimer’s Association, Alzheimer’s and other related dementias affect millions of Americans each year, with Alzheimer’s being the most common. Some of the warning signs include memory loss, confusion, disorientation, language difficulty, changes in mood, personality or behavior, judgment and thinking problems and difficulty performing familiar tasks. John Mackey showed many of these warning signs.

Sylvia Mackey saw the changes early but did not want to believe something was wrong with her husband. Around 1994, she could tell his speech wasn’t as great, and things were getting worse. In 1997, Mackey pawned his Super Bowl and Hall of Fame rings for no apparent reason. Finally in 2001, he was diagnosed with frontotemporal dementia. Today, Sylvia speaks to NFL wives and other women’s groups and urges them to follow up if they notice changes in their husband’s behavior.

"The NFL is desperately fighting to avoid any liability for all the carnage left behind by concussions. They need to be held accountable," said former Viking OG Brent Boyd, who has been diagnosed with post-concussion syndrome. Boyd currently receives the minimum, non-football related disability payment from the NFL, and still suffers from depression, headaches, fatigue and dizziness.

As I explained here:

There are significant consequences for current players in an uncapped year. Disability Benefits for retired NFL players are paid from two separate funds. One of those funds is protected by law and cannot be reduced if their were a work stoppage. However, the other fund is supplemental and can certainly be reduced if a new CBA is not reached prior to a work stoppage in 2011. For a football-related disability, i.e., one that occurred on the field and renders a player unable to work in another occupation within 6 months of the injury, a player gets $224,000 in disability payments now. In an uncapped year, the payment would shrink to $48,000 annually. An active player who becomes disabled in an accident off the field get $134,000 a year now; he’d get $48,000 in the uncapped year. NFL players could lose their family's health insurance next spring, plus their 401(k) retirement plan matches and nearly every other league-provided benefit.

 

In Summary, the Pension plan has improved over the years and the League has done something to address disabilities in retired players. However, it is merely a beginning to the solutions of medical problems that occur to just about every NFL player, and must be accounted for in the next CBA.