Summer is ending, and for some, this is tragic news. Soon, it will be time to bust out the leaf blowers and the snow shovels. However, as football season approaches, this is a time of pure joy for football fans.
As the NFL season kicks off, fans eagerly anticipate the action on the field–but not every player is going to return to the gridiron this year. Just like all workers, NFL players reach a point when retirement becomes inevitable. So how are Jason Kelce, Tom Brady, and other players going to cover their expenses now that they’ve hung up their jerseys for good?
Did you know NFL players receive a pension upon retiring? The benefit serves as a crucial safety net–especially for the players who don’t walk away with lucrative endorsement deals. The NFL’s Bert Bell/Pete Rozelle NFL Player Retirement Plan ensures that players are financially supported long after their playing days are over. Players become fully vested in the plan after three years on active roster or injured reserve. The benefit amount is then based on the number of credited seasons played. As of 2023 the average annual NFL player’s pension benefit was $43,000 annually.
Now, a skeptic might ask why NFL players need pensions at all when they receive such exorbitant salaries. While it’s true that the average player earns $2.8 million a year, it’s important to remember that the average career length is only 3.3 years, and the profession comes with significant health risks. A defined benefit pension plan is critical to the long-term well-being of these athletes, especially those whose careers are cut short.
The NFL pension plan has shown remarkable progress in its funding status. In April 2014, it was funded at 55.9%, but by 2018, it was 89% funded. This is a testament to the plan’s sustainability and reliability, offering players consistent retirement income, as well as survivor and disability benefits. Which is important for NFL players, as data indicates NFL veterans may suffer from increased the risk of dying younger or suffering from brain disease.
The NFL is not the only professional sports league with a defined benefit pension plan for its retired players. The MLB has had a pension plan since 1947 and is 87% funded. The NHL started its pension plan in 2012 and is remarkably funded at 130%. The NBA pension started in 1965, however it is only funded at 38%.
As one of the most exciting times of the year commences, it’s important to remember that having a pension plan is the best option for retirement, and regardless of the job or salary, a defined benefit contribution plan is a safety net everyone can rely on.