An amendment made to the Bert Bell/Pete Rozelle NFL Player Retirement Plan, which was made effective April 1, 2007, reduces the monthly pension benefit of plan participants who elect the Qualified Joint and Survivor Annuity Option or the Life and Contingent Annuitant Pension Option. The reduction can be as large as an 8% decrease of the monthly benefit.

A vested player may elect to receive his benefit in one of the following five forms as described in the official retirement plan document:

Life only pension – Equal monthly pension payments payable during the Player’s lifetime only.

Qualified joint and survivor annuity – A monthly annuity for the life of the Player with a monthly survivor annuity for the life of the Spouse equal to 50% of the amount of the monthly annuity payable during the life of the Player, which will be the Actuarial Equivalent of the life only pension form of the benefit.

Life only pension with Social Security adjustment – Monthly pension payments payable during the Player’s lifetime adjusted such that the sum of the pension payment plus the Player’s expected Social Security benefit beginning at age 62 is the same before and after age 62, and further adjusted such that the Player’s monthly pension from the Plan will not be less than $50. This option may only be elected by a Player who has at least one Credited Season prior to the 1993 Plan Year. This option is not available with respect to Benefit Credits for Credited Seasons prior to 1959.

Life and contingent annuitant pension – Equal monthly pension payments payable to the Player during his lifetime, and if the Player predeceases the person designated by him as his contingent annuitant, all or a fraction of his monthly pension, as designated in writing by the Player, will continue for the life of the contingent annuitant. The contingent annuitant must be the Player’s Spouse, parent, child, brother, sister, or Dependent.

Life and 10-year certain pension – Equal monthly pension payments payable for the greater of 120 months or the Player’s lifetime, with any remaining guaranteed payments being continued after the Player’s death to his designated beneficiary or, if none, the Player’s estate.

The amendment effects players who have elected either the Qualified joint and survivor annuity or the Life and contingent annuitant pension with their spouse named as their beneficiary and began drawing a pension after April 1, 2007. This group includes players who have yet to begin drawing a pension, including all active players.

The qualified joint and survivor annuity and the life and contingent annuitant pension are popular forms of payment for married players. Under these two forms of payment, if the player dies before his spouse, the spouse will continue to receive a benefit for the remainder of the spouse’s life. When choosing either of these two options, the benefit amount received during the player’s lifetime is reduced actuarially to account for the continued survivor benefit after the player’s death.

With the April 1, 2007, amendment, the NFL Retirement Plan implemented a “pop-up” provision. What is a “pop-up” provision? The pop-up provision affects those players who have elected a qualified joint and survivor annuity or a life and contingent annuitant pension, which is the majority of retirees married at the time of payout election. If the player’s spouse dies before the player, the pop-up provision allows the retiree to go back and reclaim his “life only pension” benefit amount.

The pop-up provision seems like an improvement at first glance. However, monthly benefits for players electing a qualified joint and survivor annuity or a life and contingent annuitant pension after April 1, 2007, have decreased. If you began drawing your pension after April 1, 2007, or you have yet to draw your NFL pension, you can see how the pop-up provision has affected your benefit amount by comparing the pre-pop-up provision table with the new pop-up provision table.

By comparing the two tables it is clear that players who begin drawing their pension after April 1, 2007, receive lower monthly payments and are essentially subsidizing the pop-up provision for all retirees that began drawing their pension before that date. While union officials have recently preached the virtue of waiting as long as possible to draw your NFL pension, it is those who have waited longest that are being penalized the most. Furthermore, assuming the player predeceases his wife, she will continue to draw the lesser amount for her lifetime.

NFLPA Executive Director Gene Upshaw recently told ESPN.com, “We are not going to take a pension from guys that have one coming and give it to someone else.”

However, with this amendment, that is exactly what is being done.

How many players will ever utilize this pop-up benefit? On average, women live approximately 5 years longer than men in the United States. How many NFL wives will die before their husbands? Statistically, not many spouses will predecease their husbands. It seems the majority of players will never utilize the pop-up provision. The reduction in benefits being paid out to most players seems to be a windfall to the NFL Retirement Plan and the owners funding it.

If you have any questions regarding any of your NFL benefits you should contact the NFLPA Benefits Department. According to the NFLPA website, “The mission of the Benefits Department is to empower past, present and future NFL Players with the knowledge of their Benefits in order to make informed life stage decisions.”

NFLPA Director of Player Benefits Miki Yaras-Davis is the NFLPA representative who signed the pop-up provision amendment into effect. All questions regarding the amendment and its’ effects should be directed to her. She may be reached at (800) 372-2000.

Chiefs’ offensive tackle Kyle Turley, who donated an entire NFL game check to aid the needs of retired NFL players, was a guest on The Morning After Show on March 27, 2008. The show is broadcast on 1380 AM in St. Louis. Host Tim McKernan remarked that Turley should be the Executive Director of the NFLPA. Turley replied, “Anyone could do better than Gene Upshaw.”

Edit: In an earlier version of this post the reduction in benefits was incorrectly listed to be 6.3 percent. The actual reduction in monthly benefits can be as large as 8 percent.