A Look at Retirement Benefits for NFL Players

Word is this Super Bowl will be Broncos quarterback Peyton Manning’s last game before retiring.

With the Super Bowl this weekend, no doubt most players aren’t thinking about their retirement benefits.

However, as the word is that this Super Bowl will be Broncos quarterback Peyton Manning’s last outing before retiring, at least he’ll be thinking about it after the big game.

The Society of Actuaries (SOA) has done a study about the National Football League’s (NFL’s) multiemployer defined benefit (DB) plan. According to the report, the plan considers age 55 to be the standard retirement age. If a player waits until later to start his payments, his benefit is actuarially increased accordingly.

The NFL also offers a defined contribution (DC) retirement plan, but there are penalties for early withdrawals before age 59 1/2.

Given the young ages at which NFL players retire—Peyton Manning is 39—this means there are many years before they will receive benefits. Let’s hope that players have invested a large portion of their enormous salaries to use during this interim period. However, a study last year found initial bankruptcy filings among NFL players begin very soon after retirement from the game and continue at a substantial rate through at least the first 12 years of retirement.

As of April 1, 2014, the most recent publicly available data, the NFL multiemployer plan had $1.6 billion in assets to cover $2.9 billion of benefit liabilities—making it 55% funded. Per Pension Protection Act (PPA) zone status, this puts the plan in the yellow, or endangered, status.

However, Dale Hall, managing director of research with the SOA in Shaumburg, Illinois, tells PLANSPONSOR, the funded status improved from 48% in 2013, because the NFL is taking some big steps and making very large contributions—well in excess of benefits being earned—to get the plan fully funded. “There is information that indicates the funded status will be near 70% [for] 2015,” he says.

Hall says there are 21 benefits offered to NFL players per the collective bargaining agreement (CBA). A look at the CBA shows players are offered extended post-career medical and dental benefits, a disability plan, long-term care insurance and neuro-cognitive disability benefits.