RetiredPlayers.Org

An amendment made to the Bert Bell/Pete Rozelle NFL Player Retirement Plan, which was made effective April 1, 2007, reduces the monthly pension benefit of plan participants who elect the Qualified Joint and Survivor Annuity Option or the Life and Contingent Annuitant Pension Option.  The reduction can be as large as an 5% decrease of the monthly benefit.
A vested player may elect to receive his benefit in one of the following five forms as described in the official retirement plan document:

Life only pension – Equal monthly pension payments payable during the Player’s lifetime only.

Qualified joint and survivor annuity – A monthly annuity for the life of the Player with a monthly survivor annuity for the life of the Spouse equal to 50% of the amount of the monthly annuity payable during the life of the Player, which will be the Actuarial Equivalent of the life only pension form of the benefit.

Life only pension with Social Security adjustment – Monthly pension payments payable during the Player’s lifetime adjusted such that the sum of the pension payment plus the Player’s expected Social Security benefit beginning at age 62 is the same before and after age 62, and further adjusted such that the Player’s monthly pension from the Plan will not be less than $50.  This option may only be elected by a Player who has at least one Credited Season prior to the 1993 Plan Year.  This option is not available with respect to Benefit Credits for Credited Seasons prior to 1959.

Life and contingent annuitant pension – Equal monthly pension payments payable to the Player during his lifetime, and if the Player predeceases the person designated by him as his contingent annuitant, all or a fraction of his monthly pension, as designated in writing by the Player, will continue for the life of the contingent annuitant.  The contingent annuitant must be the Player’s Spouse, parent, child, brother, sister, or Dependent.

Life and 10-year certain pension – Equal monthly pension payments payable for the greater of 120 months or the Player’s lifetime, with any remaining guaranteed payments being continued after the Player’s death to his designated beneficiary or, if none, the Player’s estate.

The amendment effects players who have elected either the Qualified joint and survivor annuity or the Life and contingent annuitant pension with their spouse named as their beneficiary and began drawing a pension after April 1, 2007.  This group includes players who have yet to begin drawing a pension, including all active players.

The qualified joint and survivor annuity and the life and contingent annuitant pension are popular forms of payment for married players.  Under these two forms of payment, if the player dies before his spouse, the spouse will continue to receive a benefit for the remainder of the spouse’s life.  When choosing either of these two options, the benefit amount received during the player’s lifetime is reduced actuarially to account for the continued survivor benefit after the player’s death.

With the April 1, 2007, amendment, the NFL Retirement Plan implemented a “pop-up” provision.  What is a “pop-up” provision?  The pop-up provision affects those players who have elected a qualified joint and survivor annuity or a life and contingent annuitant pension, which is the majority of retirees married at the time of payout election.  If the player’s spouse dies before the player, the pop-up provision allows the retiree to go back and reclaim his “life only pension” benefit amount.

The pop-up provision seems like an improvement at first glance.  However, monthly benefits for players electing a qualified joint and survivor annuity or a life and contingent annuitant pension after April 1, 2007, have decreased.  If you began drawing your pension after April 1, 2007, or you have yet to draw your NFL pension, you can see how the pop-up provision has affected your benefit amount by comparing the pre-pop-up provision table with the new pop-up provision table.

By comparing the two tables it is clear that players who begin drawing their pension after April 1, 2007, receive lower monthly payments and are essentially subsidizing the pop-up provision for all retirees that began drawing their pension before that date.  While union officials have recently preached the virtue of waiting as long as possible to draw your NFL pension, it is those who have waited longest that are being penalized the most.  Furthermore, assuming the player predeceases his wife, she will continue to draw the lesser amount for her lifetime.

NFLPA Executive Director Gene Upshaw recently told ESPN.com, “We are not going to take a pension from guys that have one coming and give it to someone else.”

However, with this amendment, that is exactly what is being done.

How many players will ever utilize this pop-up benefit?  On average, women live approximately 5 years longer than men in the United States.  How many NFL wives will die before their husbands?  Statistically, not many spouses will predecease their husbands.  It seems the majority of players will never utilize the pop-up provision.  The reduction in benefits being paid out to most players seems to be a windfall to the NFL Retirement Plan and the owners funding it.

If you have any questions regarding any of your NFL benefits you should contact the NFLPA Benefits Department.  According to the NFLPA website, “The mission of the Benefits Department is to empower past, present and future NFL Players with the knowledge of their Benefits in order to make informed life stage decisions.”

NFLPA Director of Player Benefits Miki Yaras-Davis is the NFLPA representative who signed the pop-up provision amendment into effect.  All questions regarding the amendment and its’ effects should be directed to her.  She may be reached at (800) 372-2000.

• Chiefs’ offensive tackle Kyle Turley, who donated an entire NFL game check to aid the needs of retired NFL players, was a guest on The Morning After Show on March 27, 2008.  The show is broadcast on 1380 AM in St. Louis.  Host Tim McKernan remarked that Turley should be the Executive Director of the NFLPA.  Turley replied, “Anyone could do better than Gene Upshaw.”

Edit: In an earlier version of this post the reduction in benefits was incorrectly listed to be 6.3 percent.  The actual reduction in monthly benefits can be as large as 8 percent.

The National Football League and National Football League Players Association announced an “expanded disability benefits program” through a press release on February 29, 2008.  A copy of the release may be viewed by clicking HERE.

The changes to the disability plan were reviewed at a downtown Washington law office during a meeting of the NFL Alliance on Thursday, February 28, 2008.  Ten “former players” attended the meeting, according to the press release, including Troy Vincent, who currently serves active players as NFLPA President. Other attendees included Roger Goodell, Gene Upshaw, NFL Alumni President Frank Krauser, and Pro Football Hall of Fame President and Executive Director Steve Perry.

Through the press release, the NFL and union announced four agreements which they claim would “significantly expand eligibility for disability benefits and increase the amount of the benefit paid to certain recipients.”

Here are the four agreements listed in the press release along with analysis:

• Agreement #1: A doubling of the minimum benefit post-career, non-football “total and permanent” disability from $20,000 to $40,000 per year for retired players who become disabled unrelated to football. Players would otherwise receive the full amount of their pension, if greater.

Analysis: The first agreement is unclear.  It appears this agreement refers to the “inactive” benefit, which is the lowest paying total and permanent disability benefit.  Section 5.1(d) of the Bert Bell/Pete Rozelle NFL Player Retirement Plan currently lists this benefit to be no less than $1,500 per month, which equates to $18,000 per year.  The NFLPA White Paper, which was created in 2007 by the Groom Law Group, also lists the minimum benefit as $18,000, not $20,000 as listed in the press release.

This increase will double the benefit to former players collecting total and permanent disability benefits for “post-career, non-football” disabilities.  It only applies to players who become disabled outside of the game of football.  This change does nothing to address the needs of players who become disabled due to their NFL related injuries.

• Agreement #2: Players who took their NFL pension early, and are therefore ineligible to apply for and receive disability benefits, will be offered a new one-time opportunity to apply for total and permanent disability benefits. These players may establish their disability through either a medical examination or by a total and permanent disability determination from Social Security. The opportunity to apply for benefits will begin on April 1, 2008. Applications will be accepted through July 31, 2008.

Analysis: Many times players are forced to pay the medical bills related to their NFL injuries after their football careers have ended.  This financial burden is a cause for players to take an early pension.  In 2005, Carl Prine of The Pittsburgh Tribune-Review reported that former Raider great and NFL Hall of Famer Jim Otto spent more than $500,000 of his own money to treat his post-NFL health issues. Former Pro Bowl player Dave Pear reports that he has also spent over a half million dollars out of his own pocket treating his NFL related health issues.  This second agreement will give some former players an opportunity to apply for disability benefits within a four month window.  These players would not have had this opportunity under current NFL Retirement Plan rules.  It is critical that the NFL and the union spread the word about this brief four month window as quickly as possible to the players it may affect.

During a recent interview, NFLPA Executive Director Gene Upshaw gave incorrect information telling The Washington Post that such an agreement would be illegal.  “Once he took that pension, that was it: He can’t get a disability [benefit]. That’s not only the rule of the retirement plan — it’s the law,” Upshaw stated referring to former NFL player Dave Pear.  If Upshaw is not aware of what can be negotiated at the bargaining table it puts all players, active and retired, at a disadvantage during negotiations.

• Agreement #3: Players who have received a total and permanent disability determination from Social Security will not need to separately establish disability under the NFL plan. Players who were denied benefits under the NFL plan but have subsequently been found disabled by Social Security may have their NFL cases reconsidered. The other good news for retired NFL players is that NFL disability awards are not offset by the amount of any award paid by Social Security.

Analysis: This agreement was first announced in June of 2007 and, hopefully, it will be applied to NFL disability applicants in the near future.  The wording of the agreement number three is not as strong as the wording used by NFL and union representatives during the congressional hearings of 2007.  In June of 2007, NFLPA representative Doug Ell testified to the Subcommittee on Commercial and Administrative Law that the NFL and NFLPA “recently agreed to immediately grant T[otal]&P[ermanent] benefits to players already receiving social security disability benefits.”

The press release states that “players who were denied benefits under the NFL plan but have subsequently been found disabled by Social Security may have their NFL cases reconsidered.”  Reconsidered does not mean “to immediately grant”.  Is this third agreement consistent with the congressional testimony given?

Current NFL Plan rules allow up to 42 months of retroactive benefits.  Will the NFL plan pay up to 42 months of retroactive benefits to former players who have been approved for Social Security disability benefits in the past, but denied their NFL disability benefits?  Will players who qualify for Social Security disability benefits be awarded “football degenerative” benefits or will these players be awarded the lowest paying “inactive” benefit?

It can often take years to be approved for Social Security disability benefits.  Under the Employee Retirement Income Security Act of 1974, the NFL Plan must make determinations on disability applications and appeals in a far shorter time period than decisions are usually made on Social Security Disability applications.  How will the NFL Disability Plan address the difference in the length of time in which they are mandated to reach a decision on an NFL disability application versus the often longer period of time it can take to receive a decision on Social Security disability?

Les Carpenter of The Washington Post penned an article on June 21, 2007, which describes how the NFL Disability Plan spent more than $140,000 of plan assets to prevent the Social Security standard from being applied to NFL disability claims.

• Agreement #4: The time within which to apply for line of duty disability benefits has been lengthened from the current 48-month period to 48 months or the player’s actual number of credited seasons. For example, a 10-year veteran would have 10, rather than, as previously, four years, to apply for this benefit.

Analysis: The last of the four agreements should help some players who played longer than four seasons and choose to apply for “line of duty” disability benefits.  This agreement will not effect the majority of players since the average NFL career lasts about three and a half seasons, according to the NFLPA website.

The Retirement Board could use this expanded time frame to the detriment of disabled players.  The “line of duty” benefit is a partial disability benefit.  In the past, the NFL plan could only award the partial disability benefit if the application was filed within 48 months.  Now, depending on the length of an NFL player’s career, there is a potentially longer period of time in which the partial disability benefit could be awarded.  The minimum partial disability award for the “line of duty” benefit is $12,000 per year.

Prior to the announcement of these four agreements, the only disability benefit a former player under age 45 could receive after 48 months of ceasing to be an active player for injuries arising “out of League football activities” was the “degenerative” benefit.  This benefit pays $110,000 per year.  Instead of awarding the larger “degenerative” benefit to a player who applies for disability benefits after 48 months with football related injuries, the Retirement Board could now award a former player the lower paying “line of duty” disability benefit, which lasts a maximum ninety months.  This agreement gives the NFL Disability Plan more opportunities to award a partial disability benefit when the possibility exists that an award for the higher paying “degenerative” benefit would be more fitting.

It is hoped that these four changes will provide some aid to retired players.  There are many questions left to be answered before a true assessment can be made on these changes.  Currently, only 2% of retired players receive any type of NFL disability benefit, partial or permanent. This is a major area of concern.  There is speculation that these changes are being made to create the appearance that no legislative action is needed for the NFL Retirement Plan to operate in an equitable fashion.  The House Judiciary Committee has requested a Congressional Research Service report which is due to be completed soon.  Any legislative action to be taken will likely be based on the results of this report.

The four changes to the disability plan should be some source of inspiration for players who have voiced opinions of the current NFL Retirement Plan.  The changes indicate that players voicing their opinions can initiate change.  However, the problems will not be corrected merely with amendments to the Plan document.  The administration of the plan must be addressed as well.

Also:

• In his new book, Dr. Bennet Omalu, a forensic pathologist, states “about one in every 1,500 Americans between 60 and 69 suffers from dementia.  In contrast, approximately one in every 170 of the nearly 10,000 living retired players are registered with the NFL’s ’88 Plan,’ which contributes up to $88,000 per year to veterans suffering from dementia.”