Nov. 15, 2017
NFLPA President, Eric Winston needs to understand what happens if the NFL dies
Eric Winston, the President of the NFL Players Association recently made this comment about the future of football:
“Honestly, I don’t care - and I don’t think the guys in this locker room care - whether this thing’s going to be around in 20 years, because none of us are going to be playing. So, if these guys [the owners] want to own for a long time, then they can own for a long time. But another work stoppage might kill the golden goose. So, I’m certainly not worried about it, I’m not going to be around that long. And I don’t care even if there are rookies in here, they’re not going to be playing that long. So, if this thing dies out in 20 years, it dies out in 20 years. But that’s not really my concern and I don’t think it’s any of the players’ concern in here either.”
It should be their concern….and the concern of all retired players too!
And here’s why.
The Bert Bell/Pete Rozelle Pension Plan is funded through owner contributions required by the NFL’s Collective Bargaining Agreement and ERISA (Employee Retirement Income Security Act) rules and regulations.
If for some reason the NFL were to die and become “insolvent” and the owners declared bankruptcy, all players vested in the Pension could end up falling under the PBGC (Pension Benefit Guarantee Corporation), a federal insurance agency. The PBGC’s maximum guarantee limit is $429 per year of service. For example, Mr. Winston’s maximum annual payment for the 12 years he has played in the NFL would be just $5,148.
I know the year 2038 may seem like an eternity - and too far off in the future for Eric to care about today - but let this old timer give him some free advice: Father Time has a way of sneaking up on you real fast, so if you are lucky enough to qualify for the NFL Pension, be thankful it will be waiting for you when the time comes to take it.
Former players do not have the best track record when it comes to investing and saving money for the future. A Sports Illustrated article from 2009 indicated that after two years of retirement, a whopping 78 percent of former NFL players went bankrupt, so having a good retirement plan should definitely be something all active NFL Players should be concerned about.
So how much would Eric Winston receive if he doesn't die - the NFL doesn’t die - and they are both alive and well until the day he is eligible to collect his pension, just 21 short years from now?
Well, let’s look at the formula for determining what Eric's NFL pension will be at age 55.
Eric has played in the NFL from 2006 to 2017. He has 12 credited seasons. Here is the formula for the monthly amount he would receive based on the current CBA.
2006-2011 6 seasons x $470 per credited season = $2,820
2012-2014 3 seasons x $560 per credited season = $1,680
2015-2017 3 seasons x $660 per credited season = $1,980
Add all of those together and at the normal retirement age of 55, Eric Winston will be receiving a monthly check of $6,480 under the “Life Only” beneficiary designation. His annual amount would be $77,760. That amount would be slightly less if he is still married and he chooses his wife as the beneficiary of ongoing payments in the event that he dies before she does.
If Eric defers his pension until age 65, it will increase at an actuarial rate of 2.619 times greater than the amount he would have received at age 55. Therefore, his monthly benefit would increase to $16,971 and his annual amount would increase to $203,653. Again, that amount would be slightly less if he is still married and he chooses his wife as the beneficiary of continuing payments.
So, I wonder which amount Eric Winston likes better?
$203,653 annually from an NFL that is still alive, or.....
$4,290 annually from the PBGC that will put some players on life-support?
The thing that Eric Winston doesn’t quite seem to understand is that the demise of the NFL means the demise of the NFL Pension Plan - and with it, the demise of the standard of living for thousands of former players that are currently receiving monthly pension checks and thousands more that will receive them in the future.
Those checks mean a lot more to former players than a player like Eric Winston, who has made over $30 million during his career and will have many other benefits waiting for him when he retires. In fact, he will have two other retirement type benefits waiting for him: The Second Career Savings Plan and the Annuity Plan.
Those benefits will easily eclipse the annual amount of Eric's pension payments, so you can see why he’s not very concerned about the NFL going under. You can read about those benefits here: NFL Player Retirement plans: There's more than one!
Payments to those plans are fully funded by the NFL owners and each player’s individual account will continue to grow from the interest earned on their investments. So even if the NFL dies, Eric will still have a huge nest egg waiting for him. Under the Annuity Plan, which came into existence in 1998, a 10 year player could have as much as 6 million dollars waiting for them at age 65, which they can take in a lump sum or in monthly payments! I wrote about this at the following link: The NFL Player Annuity Plan: How Sweet it is!
The NFL Retirement board is projecting that the Pension Plan will be fully funded by 2020. But that’s just a “projection” and just as long as the fund is at 80% of the assets needed to pay all obligations, they are ok under the rules and regulations of ERISA.
The NFL Pension Plan is currently underfunded by approximately $590 million and if the League were to fold before 2020, due to the cancellation of a season (or seasons), it may not have the assets to pay all of its past, present and future obligations.
Our Pension could fall faster than a QB being sacked due to a missed blocking assignment from an offensive tackle. Eric knows how quickly that can happen.
So, who would be responsible for the death of the “Golden Goose?”
If the owners lock out the players, it is likely that the NFL Players Association will decertify the union and file a class action lawsuit, just like they did the last time. The only difference is, this time the NFLPA will have a huge strike fund that could help players in the event that there is an extended battle in court and an entire season is cancelled.
Could the NFL survive a season without football? Maybe…..and maybe not. But there’s no doubt it would seriously damage the sport and substantially reduce the revenue coming into the League - revenue that is used for salaries and benefits – including the NFL Pension Plan.
Whether NFL football dies a fast or slow death, both sides will be responsible for killing the Golden Goose - and with it, the eggs in the NFL Pension plan nest that thousands of former players currently rely on to meet the basic costs of living in retirement.
And what about guys like me, that are deferring our Pension Plan payments until age 65? Will it still be there for us? That's a scary thought.
In the event of a lockout or a strike, do the owners and the active players really want to see who can hold out the longest? By doing that, they will further alienate their entire fan base and potentially destroy a League that started in 1920.....almost 100 years ago!
We won’t really know until after the 2020 season, but I just hope that Eric and the active players understand what is at stake – not just for them, but for all retired players vested in the NFL Pension Plan.
It is also worth mentioning that a total collapse of the NFL could affect our recent NFL Concussion Settlement agreement that runs for the next 65 years. If there is no money coming in, it's likely that there will be no money going out to players that are diagnosed with cognitive impairments in the future.
As former players, we are trying our best to convince the NFL and NFLPA that we deserve an increase in our pensions, so I hope Eric and all the active players, will work as hard as they can to come to an agreement that keeps the game alive and prosperous for years to come.
Please protect our blind side and don't let our pension plan get sacked!