The NFL Player Annuity Plan: How Sweet it is!

By Jeff Nixon
Nov. 26, 2016

While the Hall of Fame players and their wives continue to lobby the NFL on increasing the pensions of pre-1993 players, I thought you might like to know what has already been done to increase the pensions and other retirement type benefits for post-1993 players - and why we believe that their needs to be a more equitable distribution of funds. In this article I will focus on the PAP (Player Annuity Plan) which went into effect in 1998.

Before I talk about the PAP, please keep in mind that the average annual salary of a current player is now over two million dollars. Total salaries and "guaranteed" bonuses for 1,700 players are now over 5 Billion annually. On top of that, Pensions for players will increase 3 times under the current CBA and top out at $760 per credited season in 2018. 

So, with that said, here is some basic information about the PAP, but please read my comments immediately after the fold. 


The PAP provides deferred compensation to players. The Annuity Plan invests the players’ collective deferred compensation. The Annuity Plan is divided between a Qualified Account and a Non-qualified Account. The Qualified Account includes the maximum amount of compensation that can be deferred on a pre-tax basis pursuant to IRS rules. The maximum amount that could be deferred on a pre-tax basis in 2016 was $53,000. The amount contributed to the Annuity Plan above this amount is the Non-qualified Account portion and must be taxed before being invested as part of the Annuity Plan.

Eligibility:  A current or former player - since 1998 - with at least one Credited Season. A player does not vest in his Qualified Account until he has earned at least three Credited Seasons. 

When Eligible: A player can elect to receive a distribution at any time after he is done playing, provided the player is at least 45, or is at least 35 and five years have elapsed since the player last earned a Credited Season. Distributions must begin no later than the first day of the month after the player turns 65.

How much is the club contribution? A player receives a small $5,000 contribution in their 2nd and 3rd credited seasons and then in their fourth season and each additional season the amounts go up dramatically.  From 2011-2013, each vested player will receive $65,000 per year. From 2014-2017, each player will receive $80,000 per year and from 2018- 2020 each player will receive $95,000 per year.

Payment Type: Players may elect different distributions forms and different dates for payments to begin. Payment forms include: (1) annual installments until the player reaches 45; (2) an annuity for life; (3) a reduced annuity for your life, with a survivor annuity beginning after the player’s death; (4) a lump sum, if the former player is at least 45 when the lump sum is to be paid; and, (5) a partial lump sum, if the player is at least 45 when the partial lump sum is paid, with the remainder paid in one of the other payment forms.

How is the Annuity allocation invested? Contributions are paid into a trust administered by the Annuity Board. Program participants are the sole beneficiaries of the trust. The trust is the owner of a group annuity contract with the NFL Player Insurance and Annuity Company. The Annuity Board, with the assistance of Mike Lipper of Lipper Analytical Services, will develop and implement an appropriate investment policy.

Total benefit amount: The benefit the player receives depends on: the value of the player’s account; the player’s age; the player’s marital status; and, the type of payment plan selected by the player.


So let’s look at what a player might expect to receive based on their portfolio of investments. I used a modest 7% annual return on investments to calculate the total. So let’s look at the example of a vested player who will play over the 10 year course of the current CBA.  For example, someone like Drew Brees who currently earns 23 million a year and may eventually play until 2020. Obviously, Drew is not your typical player, and this calculation would be at the extreme end of the scale, but it doesn’t hurt to show how this one benefit can make someone very comfortable in retirement.  

Here are the contributions into this hypothetical player’s Annuity Plan each year beginning in their 4th year (this does not include the $10,000 they would have received in their first three years 2008-2010):

2011: $65,000;    2012: $65,000   2013: $65,000;   2014: $80,000;   2015: $80,000;   2016: $80,000;  2017: $80,000; 2018: $95,000;    2019: $95,000;  2020: $95,000

This player would receive approximately $800,000 into their Player Annuity Plan. If they waited until age 65 – about 30 years - to draw on their funds, they would have over 6 million dollars – which they can take as a lump sum or in monthly payments! You can use this calculator to see what the total would be if the Annuity was taken at age 45 or 55.  You can also reduce the total contribution and/or adjust the interest rate.   

Remember, this is a very rough estimate. It doesn’t take into consideration the fact that the $800,000 is received over a 10 year period – which would make the total amount go up even higher. Nonetheless, it is probably not far off the mark.

As of March 31, 2015 there was over 1 Billion dollars in the Player Annuity Plan and 4,710 players have qualified for the PAP. The NFL is currently paying out over 102 million in annual benefits to just 223 players that are currently drawing on their PAP - or have taken a lump sum from their PAP.  Remember, this is just one of the retirement type benefits that post-1997 vested players will receive in addition to their regular pension plan benefits. I haven’t even talked about the Second Career Savings Plan which has over 1.8 Billion in assets payable to players that played from 1993 and forward.

If anyone says the NFL just doesn’t have the money to increase pre-1993 former player pensions…..please direct them to this article and the one I posted on December 3, 2015 entitled NFL Player Retirement Plans – there’s more than one! 

By the way, if you haven’t signed the NFL Legacy Fund Equitable Pension Parity Petition, you can print it out (below) and send it in the mail to Tom Mack at the following address:  52 Grand Miramar, Henderson, NV  89011

You can also send him an email at and let him know that you support the Petition.