Who Serves As Actuary for the Bert Bell/Pete Rozelle NFL Player Retirement Plan?

Posted June 23rd, 2008 by RetiredPlayers

The role of an actuary is vital in the administration of retirement plans. Actuaries are counted on to manage assets, determine the liabilities of the plan, calculate contributions to be made, and examine the feasibility of benefit increases.  The actuary also analyzes data to determine the likelihood of an event taking place.  One event likely to be examined by an actuary is the probable number of workers who will likely collect disability benefits available through a retirement plan.  The financial health of a retirement plan and ultimately its’ participants is dependent on the work conducted by the plan actuary.

Who serves serves as actuary to the Bert Bell/Pete Rozelle NFL Player Retirement Plan? According to the plan’s filing with the Internal Revenue Service and the Department of Labor, Aon Consulting serves as the plan actuary.  Patrick Ryan is the founder and Executive Chairman of the Aon Corporation, while Andrew McKenna is a member of Aon’s Board of Directors.  SportsBusiness Journal reports that Ryan and McKenna bought 20 percent of the Chicago Bears in 1990.

It is a conflict of interest for Ryan and McKenna’s company to determine the amount that NFL owners must contribute to fund NFL players’ pension and disability benefits. Both Ryan and McKenna are owners of a team who must make contributions into the Bert Bell/Pete Rozelle NFL Player Retirement Plan. The NFL Retirement Plan’s filing with the Internal Revenue Service and Department of Labor does not acknowledge this relationship.

There are six voting members of the NFL Retirement Board. Three of the members are appointed by the NFL Management Council and three members are appointed by the NFLPA. Why would the three NFLPA appointed members of the Retirement Board agree to delegate their power to the Aon Corporation, a company founded and directed by an NFL team owner? If the three NFLPA appointed trustees opposed delegating their power to the Aon Corporation a new retirement plan actuary would have to be chosen.

It is the responsibility of current players, the NFLPA’s Board of Player Representatives, to select the NFLPA’s three Retirement Board members. It is clear that the NFLPA’s current three members of the Retirement Board are not acting in the active players nor the retired players best interest by choosing an NFL team owner to act as the retirement plan actuary. The NFLPA will be relying on actuarial data when negotiations for benefits take place during the next round of collective bargaining. It is a necessity to have a truly independent actuary in place so players can negotiate with the owners on a level playing field.

NFLPA Constitution Ignored

Posted June 9th, 2008 by RetiredPlayers

On May 20, 2008, the NFL owners voted unanimously to opt out of the current collective bargaining agreement. The current labor deal the owners have with players will now end in 2011 instead of 2013. If there isn’t a new CBA in place by the 2010 season, the 2010 season will be played without a salary cap.

In an uncapped year there would be restrictions which limit teams’ spending in the free agent market. To become unrestricted free agents NFL players would need six years of service instead of four. The final eight teams in the playoffs would be restricted in their activity in the free agent market. Also, in an uncapped year, teams will not have to fund numerous player benefit programs. Contrary to what the NFLPA staff has told them, going into an uncapped year isn’t necessarily attractive to NFL players.

Negotiations for a new NFL collective bargaining agreement will take place before the 2010 season. Article VI of the NFLPA Constitution details how the union will conduct itself while negotiating a collective bargaining agreement. Article 6.02 of the constitution states that the eleven members of the NFLPA Executive Committee and the NFLPA Executive Director will serve as the Negotiating Committee during collective bargaining negotiations. This article of the constitution has been in place since at least March of 1994.

In direct conflict with the NFLPA Constitution, not a single active NFL player served on the negotiating team during the last round of CBA negotiations in March of 2006. Many members of the NFLPA Executive Committee, including then-NFLPA President Troy Vincent, were attending the NFL Business Management and Entrepreneurial Programs held at the Stanford Graduate School of Business and the Kellogg School of Management while CBA negotiations were taking place. Article 4.10 of the constitution states that it is the responsibility of each member of the Executive Committee to attend the collective bargaining sessions. The only permissible excuse for absence being a close family illness, or other personal emergency. The excuse must be approved by two-thirds vote of the Executive Committee.

In October of 2006, after the Major League Baseball Players Association had just agreed to a five-year labor contract, MLBPA Executive Director Donald Fehr stated, “Nearly 100 players participated in negotiating meetings, and many times that number in internal discussions.”

In his book, A Whole Different Ball Game, former MLBPA Executive Director Marvin Miller wrote, “I wasn’t comfortable about meeting management without players as participants and as witnesses.”

Why doesn’t the NFLPA have the same level of player participation in CBA negotiations as the MLBPA?

One NFL agent told SportsBusiness Daily of the NFLPA, “Players are sick of the way they’re being treated. The arrogance is out of control.” The agent commented on the NFLPA staff saying, “The guys on top have been there for so long. They think everyone is an idiot and there is no communication with the membership. Management is always defensive and runs roughshod.”

The only way NFL players will be able to address the issues they feel are important in a collective bargaining agreement is if they are present for negotiations. Players should not just be asked to give a “yes” or “no” vote in approving the CBA when negotiations have concluded. However, this is what was done in 2006.

While Gene Upshaw has stated, “We’ll never agree to a rookie wage scale.” Many players, including NFLPA President Kevin Mawae, have commented on the need for a rookie wage scale. NFL players need to take control of their union. The only way player’s voices will be heard during CBA negotiations is if they are present. It is the union staff who works for the players and not vice versa.

A copy of the entire NFLPA Constitution may be viewed by clicking HERE.