· “Is the Bert Bell/Pete Rozelle NFL Player Pension Plan “over-funded”? That is, does it have surplus assets that can be used to increase the pensions of retired playersover-funded”? That is, does it have surplus assets that can be used to increase the pensions of retired players?
No. Even without the CBA increase, the liabilities of the Pension Plan for benefits already earned by retired and current players exceed the assets of the Plan. There is no surplus. As of April 1, 2006, the actuarial liability of the Pension Plan was $1.034 billion, which was $71 million, or about 7%, more than the market value of its assets. A pension plan with assets to cover 93% of its obligations is healthy and well within the range of funding required by recently enacted federal pension legislation, but this shortfall will grow considerably when the burden of new benefits for retired players (recently negotiated in the Collective Bargaining Agreement extension) is added. The increased benefits, and a new 88 Plan for retired players with dementia, will be funded by about $250 million of owner contributions over the next six years.
The NFL Player Pension Fund is sometimes compared to the pension fund for Major League Baseball players, often without all of the facts being presented. A future FAQ will deal with this comparison in more detail, but the NFL Player Pension is much better funded (that is more of its obligations are covered by its assets). The baseball players’ pension plan was under-funded as of April, 2004 (the latest public filing) by $904 million, and its assets were only 60.7% of its obligations on that date.
· Inadequate funding creates a risk that retirees may have their benefits reduced. This is a major problem in the steel, airline, and automobile industries. The NFLPA is committed to full funding of the Pension Plan as soon as possible; so that decades from now retired NFL players will be assured of receiving the pension benefits they have been promised. How does collective bargaining in the NFL work?
Collective bargaining in the NFL is the process by which the representatives of the players and the representatives of the owners/clubs negotiate a legally-binding agreement (called the Collective Bargaining Agreement or CBA) which governs the employment relationship between players, on the one hand, and the clubs and league, on the other, and covers compensation, working conditions, and benefits. Under federal labor law, the NFL Players Association is the exclusive bargaining representative for players. The lead negotiator for the NFLPA is its Executive Director, Gene Upshaw. The NFL owners and clubs are represented for bargaining purposes by the NFL Management Council, whose chairman is Harold Henderson. Henderson is appointed by the NFL Commissioner.
Labor law requires the NFLPA and NFL Management Council to bargain in good faith over working conditions, benefits, and compensation affecting the bargaining unit of players. The bargaining unit is composed of professional football players employed, or who are seeking to be employed, by a member club of the NFL. Retired players are not part of the bargaining unit and, therefore, the NFL Management Council is not legally obligated to bargain in good faith over any improvements in already-earned player pension benefits.
Despite this fact, in every negotiation during the past 25 years, active players have spent their leverage at the bargaining table to insist that benefits be increased for players retired from football. The chart below illustrates this commitment by present players to past players throughout the era of Gene Upshaw’s leadership of the NFLPA.
