When it comes to the gridiron, the NFL isn’t just about bone-crushing tackles and jaw-dropping touchdown passes. Oh no, my friends, there’s more to the game than meets the eye. You see, just like a well-executed play-action pass, there’s something hidden behind the scenes that often goes unnoticed: the NFL pension plan.
Now, don’t get me wrong, I’m not talking about a piggy bank or a rainy day fund that players might have stashed under their mattresses. I’m referring to the real deal, the NFL players’ pension, a lifelong pension for NFL players that’s as solid as a linebacker’s physique.
NFL players are eligible to receive a pension after playing for three seasons, with the amount based on the number of seasons played and other factors. The average pension for retired NFL players is approximately $46,000 annually.
But what exactly is this NFL pension scheme? How does it work? And who’s eligible for this retirement bonus for NFL players?
Well, buckle up, dear reader, because we’re about to dive into the nitty-gritty of NFL retirement benefits. It’s a topic that might not be as interesting as what NFL players drink during the game, but trust me, it’s just as important.
After all, even the most famous players need a game plan for their post-retirement benefits. So grab your playbook, and let’s break down the NFL players’ retirement plan, one yard at a time!
A short history of NFL pensions
Before delving into the intricacies of the NFL pension, it’s crucial to grasp its historical roots. The retirement system for NFL players has undergone significant transformations over the decades, marked by several pivotal events that have shaped its evolution:
In the 1960s, the emergence of the American Football League (AFL) marked a time when players began to use their position to negotiate enhanced pensions and benefits. This era was characterized by a newfound assertiveness among players in seeking better financial security.
The union of the AFL and NFL in 1966 initially diminished the players’ bargaining strength, but the establishment of the National Football League Players Association (NFLPA) soon restored some of this lost leverage. The NFLPA played a vital role in advocating for players’ rights and interests.
During the 1970s and 1990s, a succession of collective bargaining agreements (CBAs) progressively refined and expanded the pension system for players. Among these, the landmark CBA of 1993 stands out, as it almost doubled pensions and provided retroactive enhancements for those who had already retired.
Fast forward to the present, the latest 2020 CBA allocates nearly $2 billion towards player benefits, heralding substantial increases in pensions for NFL players. This commitment reflects the ongoing dedication to improving the financial well-being of players.
NFL pensions simply explained
Navigating the NFL Pension Plan is like reading a defense on the field; it requires understanding the game’s intricacies without getting lost in the numbers. Players must meet specific eligibility criteria, such as playing a minimum number of credited seasons, to qualify for the pension. It’s a commitment, not just a fleeting reward.
Just as in the game, timing is everything. Age plays a role in when players can start receiving their pension, and the amount can vary depending on when players choose to retire.
For instance, if the player decides to postpone earnings from his pension until he is 65, he would earn 2-3 times more than if he chose to begin at 55.
The plan also includes additional benefits and considerations. Depending on the length of their career, players may qualify for extras like health insurance and annuities, akin to earning extra points for exceptional performance. However, taking the pension early might come with penalties, while waiting until a certain age might increase the benefits. It’s a game of risk and reward, where strategic decisions can lead to greater gains or potential losses.
Once qualified, the pension provides lifelong support, reflecting the league’s commitment to its players even after they’ve left the field. The NFL Pension Plan is more than just a financial safety net; it’s a carefully crafted system designed to support players in their post-football lives.
In the high-stakes game of professional football, understanding how this plan works is key to making the most of the opportunities provided by the NFL’s pension scheme. It’s not just about the glory on the field; it’s about securing a future. Just like in football, knowing the rules of the NFL Pension Plan is half the battle won!
Now let’s talk about numbers.
NFL Pension Requirements
When I started researching this, I thought my head it’s gonna explode, especially when I read NFL Retirement Playbook. After long research about when do NFL become eligible for pension plans, here are the main takeaways:
- NFL player has to be at least 55 years old, but if they wait until they are 65 before collecting, they will get more (a lot more)
- Players who retired before 1993 can claim their pension at 45. Of course, if they wait, they will get more
- A player must have at least 3 accrued seasons in the league. This is down from 4 required years from the previous NFL CBA
- Each season counts as a credit, which determines the pension amount
- Once a player begins receiving a monthly pension, it is guaranteed for life
How much is the average NFL pension?
The amount a retired player can earn depends on several factors, including the number of seasons played and contributions to their own pension.
The average NFL pension is about $46,000 per year, with the highest reaching approximately $300,000 and the lowest around $19,800 annually.
Players with careers spanning up to 10 seasons receive more than those who played just three seasons, as each season represents a credit towards the pension. The more seasons played the more credits, resulting in more money in a pension.
| Player | Credited Seasons | Earliest age BCP may begin | Monthly BCP at age 45 (single life annuity) | Monthly BCP at age 55 (single life annuity) | Monthly BCP at age 55 (joint and 50% survivor) | Monthly BCP at age 65 (single life annuity) |
|---|---|---|---|---|---|---|
| Player A | 1992 – 2000 (9) | 45 | $1,442 | $3,190 | $2,855 | $8,355 |
| Player B | 1986 – 1995 (10) | 45 | $1,189 | $2,630 | $2,354 | $6,888 |
| Player C | 1972 – 1980 (9) | 45 | $1,017 | $2,250 | $2,036 | $5,893 |
| Player D | 2005 – 2006 (2) | N/A | N/A | N/A | N/A | N/A |
| Player E | 2005 – 2010 (6) | 55 | N/A | $2,820 | $2,524 | $7,386 |
Here is an example of a player who played from 2011-2018 in the MLB.
- 2011: $470 per Credited Season (1 season)
- 2012 through 2014: $560 per Credited Season (3 seasons)
- 2015 through 2017: $660 per Credited Season (3 seasons)
- 2018: $760 per Credited Season (1 season)
The total pension amount would be calculated as follows:
- 1×$470=$470
- 3×$560=$1680
- 3×$660=$1980
- 1×$760=$760
Total pension amount: $4890 per month, beginning at the normal retirement age (55 years old).
The new CBA in the NFL has garnered attention mainly for the advantages it offers to current players. However, it may hold even greater significance for the league’s retired players.
The NFL Alumni group, based in Mount Laurel, has revealed that the over 10,000 retired players or alumni of the NFL will experience substantially enhanced benefits under the new agreement between the owners and players.
The CBA proposal was narrowly approved by the current players, with a vote of 1,019 to 959, as announced by the NFLPA on Sunday. A mere majority was required for the proposal’s acceptance.
Under this new agreement, average pensions for players are set to increase from $30,000 per year to $46,000 per year. This boost in pension will be realized by more than 10,000 former players, marking a significant enhancement in the support provided to those who have previously contributed to the game.
Another contributing factor is the 401(k) plan, where a player can contribute a portion of their salary during their active playing years into their pension, up to $19,500 a year. Additionally, the NFL Annuity Program can provide another source of income, depending on how much was contributed by the NFL in each credited season.
The NFL pension program has evolved over time through negotiations and agreements, reflecting the league’s commitment to supporting players in their post-football lives. The typical NFL pension ranges from around $19,800 to $201,453 per year, offering retired players a significant source of income and benefits that extend beyond their playing years.
However, as we have said before, the NFL pension can be higher than $200k, as we see with the OJ Simpson case. According to this source, he earns $25,000 per month from his pension, which is $300k annually.
Here are some other NFL Pension benefits
According to official NFL documentation, here are some popular NFL pension benefits:
PLAYER INSURANCE PLAN
Medical, Dental, Vision, Prescription Drug, and Work/Life Resources coverage are provided to you and your eligible dependents. Additionally, players receive Life Insurance and Accidental Death & Dismemberment (AD&D) coverage. Once you attain the status of a Vested Former Player, the aforementioned coverage, including Medical, Dental, Vision, Prescription Drug, and Work/Life Resources, will persist for you and your eligible dependents for 5 years under the Continuing Veteran (CV) coverage.
HRA PLAN
The Health Reimbursement Account Plan is designed for the reimbursement of out-of-pocket health expenses incurred by you, your spouse, and eligible dependents. It becomes available for use after CV coverage concludes. For the year 2020, an allocation of $35,000 will be granted if you earn a Credit Season, with the account’s maximum now being $450,000 (the maximum for pre-2020 seasons was $350,000).
401(K) SAVINGS PLAN
As an Active Player, you can save money for retirement by deferring your salary into a 401(k) Savings Plan. Taxes on your contributions or investment earnings are not paid until you withdraw money. Access to your account balance is available at age 45, barring employment by an NFL Club at that time. If possible, delaying the withdrawal of your balance allows your account to grow tax-free, and you are vested in the account at all times.
How does the NFL pension compare with NBA and MLB?
NFL Pension Plan
Eligibility: Players become eligible for their pension at age 45.
Amount: The average pensions for players have increased from $30,000 per year to $46,000 per year.
Requirements: Specific requirements vary based on credited seasons and other factors.
NBA Pension Plan
Eligibility: Players become eligible for their pension at age 45, with full benefits kicking in at age 62.
Amount: A player with at least ten years of experience can receive a maximum of $215K in annual pension funds, while a three-year player must make do with about $57,000 per year if they retire at 62.
Requirements: To qualify for the pension, a player must have at least three years of service in the NBA.
Additional Benefits: The NBA offers additional benefits such as annual tuition reimbursement for retired players and lifetime medical coverage for themselves and their family.
Read more in Do NBA Players Get a Pension? (All You Need to Know) 2023
MLB Pension Plan
Eligibility: MLB players can choose to start receiving pensions as early as age 45, with a sizable payout at age 62.
Amount: A former three-year MLB player opting in at 62 could secure nearly $57,000 a year, while a 10-year vet at the same age pockets over $200,000 annually.
Requirements: To qualify for a minimum $34,000 annual pension plan, MLB players must play 43 days in the major leagues. Benefits increase to $100,000 annually after ten years in the major leagues.
Additional Benefits: Lifetime medical coverage is provided after just one day in the majors.
Read more in Do MLB Players Get a Pension? Yes, Here Are the Details (2022)
Comparison
Eligibility Age: All three leagues allow players to start receiving pensions at age 45, but the full benefits differ, with the NBA’s full benefits starting at age 62.
Amount: The NBA and MLB offer substantial pension amounts, especially for players with longer careers, while the NFL’s average pension is comparatively lower.
Requirements: The MLB has a shorter requirement of 43 days in the major leagues for a minimum pension, while the NBA requires at least three years of service. The NFL’s requirements vary based on credited seasons.
Additional Benefits: Both the NBA and MLB offer lifetime medical coverage, with the NBA extending additional educational benefits.
In conclusion, while all three leagues provide pension plans for their players, the NBA and MLB seem to offer more lucrative benefits, especially for players with longer careers. The MLB’s pension plan stands out for its relatively low entry requirements, while the NBA’s plan is noted for its additional educational and medical benefits. The NFL’s pension plan, though improved under the new CBA, still lags behind in terms of the average amount.
