The NFL retirement plan and benefits package is extensive and made up of several different programs. This makes the NFL’s benefits package one of the most confusing packages out there.
A confusing employer benefits package is not uncommon, unfortunately. The difference here is that your life as an NFL player is very different from a traditional employee. Your career is relatively short, the income you make comes as fast as it can go away and the impact of the game on your body can limit your future opportunities for a second career. This all adds up to you needing these benefits more than almost any other employee on the planet.
We believe it is vital for all players to understand your benefits while you are playing. We emphasize during your playing career because planning for retirement and life after football must start while you still have control over your career. Early planning allows you to maximize these benefits and your other retirement savings options to create true generational wealth.
Unfortunately, there are few resources that break down each of the plans in the package so you and your family can understand your benefits. We aim to change that by providing a detailed breakdown of each of the plans.
Before we do that, we believe it is important to explain a few key items that may affect your eligibility or the level of benefit you receive for some of the plans. Below are some of those key items.
What is a plan year?
A plan year, for calculating various items in the benefits package, begins on April 1st and ends the following March 31st. For example, the 2022 plan year started April 1, 2022 and ends on March 31, 2023.
When are you vested?
You must be vested to qualify for the retirement benefits the NFL and NFLPA negotiated in the latest CBA. You are vested if you have earned 3 or more credited seasons. As a note, prior to the 2020 CBA, players who played before 1993 needed at least four credited seasons but that no longer applies.
How do you earn a Credited Season?
As an active player you earn a credited season if you are on the active, inactive, IR or PUP roster for 3 or more regular or post-season NFL games, per plan year.
Additional ways you can earn a credited season:
Injury – if you are released injured and receive an injury settlement or grievance for the equivalent of 3 or more regular seasons games, you receive a credit for that season.
Practice Squad – if you are already vested (as described above) and were on the practice squad for at least 8 games in a season, you can earn a credit for that season. You can only earn this credit once.
Years of Service – if immediately before or after being an active player, you become an employee of an NFL team (example – practice squad before or coach after) and work at least 1,000 hours (during the plan year), you can earn a credited season. Note – this can’t be in the same year you earn an active player credit.
Now let’s break down the first plan in the benefits package – Bert Bell/Pete Rozelle NFL Players Retirement Plan. This is your pension and disability income plan. We will cover how the pension works based on the 2020 CBA and focus on how it impacts players who were in the league after 1993.
When can you receive pension payments as part of this plan?
There are a few different times you can elect to start receiving your pension payments under this plan.
Normal Retirement – the first day of the month after your 55th birthday or on your 55th birthday if it is the first day of a month.
Deferred Retirement – you can defer your pension payments beyond your 55th birthday up until your 65th birthday. If you defer payments beyond your normal retirement age, the amount of your benefits will be increased based on a calculation (actuary).
Early Retirement – you can elect to start your pension payments before your normal retirement (55). You can do this as early as your 45th birthday (month after or that month if first day). However, your benefit will be greatly reduced with penalties. We would never recommend doing this unless all other sources of your income/savings have been exhausted.
What are the pension benefits?
If you are a vested player (see above for definition) and begin taking benefits on or after your 55th birthday (normal retirement), below are the monthly amounts based on the years you received a credit for.
$550 – amount per credited year before 2012
As a note, the 2020 CBA includes a provision for increasing this amount after March 31, 2025 by either $25 or $50, depending on the NFL revenues.
$616 – amount per credited year from 2012 – 2014
$726 – amount per credited year from 2015 – 2017
$836 – amount per credited year from 2018 – 2030
Below are a few player examples to give you a better idea of how the payment is calculated.
18 – credited years earned. This includes 2011 as he was on injured reserve for the entire year.
$7,700 – $550 x 14 credited years (1998 – 2011)
$1,848 – $616 x 3 credited years (2012 – 2014)
$726 – $726 x 1 credited year (2015)
Total Pension (per month) = $10,274
Total games played in the NFL (regular season) – 266
Monthly Pension amount earned per game played – $38.62
3 – credited years earned. This includes 2001 when he was active for 4 games that year.
$1,650 – $550 x 3 credited years (1998 – 2001)
Total Pension (per month) = $1,650
Total games played in the NFL (regular season) – 25
Monthly Pension amount earned per game played – $66.00
8 – credited years earned. RGIII didn’t play a snap during the 2015 season but still earned a credit. However, he was not on a roster at all during the 2017 season.
$1,848 – $616 x 3 credited years (2012 – 2014)
$1,452 – $726 x 2 credited year (2015 – 2016)
$2,508 – $836 x 3 credited years (2018 – 2020)
Total Pension (per month) = $5,808
Total games played in the NFL (regular season) – 56
Monthly Pension amount earned per game played – $103.71
As you can see from the examples above, the pension plan is designed to help players who did not have a career like Peyton Manning. This is typical for any pension plan as they are designed to focus on “years of service” not necessarily the success or achievements in those years.
We hope this breakdown of the pension plan aspect of the Bert Bell/Pete Rozelle NFL Player Retirement Plan helps you have a better understanding of the pension you are playing for. There is still a lot here so please contact us to discuss your specific situation so we can help you plan for your future and build generational wealth for your family.
As a note, the plan also includes disability benefits, which we will cover in a separate blog related to all disability and health benefits under the NFL and NFLPA’s plans.
Also, we did not discuss the Legacy Credit aspect of the plan as it relates to players who received credited seasons prior to 1993. We may revisit this in a later blog post.
