CBA 101: Retirement and Benefits

In the wake of the news about Nick Hardwick's injury, the prevailing sentiment is that he has played his last snap of professional football. With an eye towards his retirement, this article will explain some of the processes in place for the retiree's team and the benefits available to the retiree.

Previously in CBA 101: Salary Cap | Free Agents | The Draft and Rookie Contracts | Intro and Definitions

Salary Cap

The affects on the team cap are the same as for a player who is released. Prorated bonuses still count against cap. Player salary is broken up into "game checks" so they will be paid for the number of games on the Active/Inactive roster or Injured-Reserve. Roster bonuses are generally for being on a team's roster on a specific date (most likely March or June 1).

Example: Nick Hardwick is in the last year of his contract signed in 2012. He is due a base salary of $3.4M, has a prorated signing bonus hit of $1.75M, and has a roster bonus worth $1M. The Chargers will account for the signing bonus in their team cap regardless of if or when Hardwick retires. Assuming he retires, the team will owe him 1/17th of his salary for every game he plays or is on IR. Regardless of the exact date, Hardwick will have earned and already been paid the roster bonus.

The exact date of retirement will likely be connected to Medical care. The team will pay for Hardwick's surgery to fix his neck and/or ankle, and then schedule his release/retirement.

Benefits

Life does not end the day you quit playing football. Hardwick will have a number of options available to him.

Bert Bell/Pete Rozelle Retirement Plan

The bulk of this document sets up the terms and amounts of a players' monthly pension payments based off of his years of service. For each Credited Season a player has (depending on the season during which it occurred), a player gets a credit for a Dollar amount. The sum of all of these individual credits is what he will receive each month during his retirement.

Example: Hardwick has 10 Credited Seasons, with 8 occuring between 1998 and 2011, and 2 between 2012 and 2014. The per season credit for those time periods is $470 and $560, respectively. Adding those up, Hardwick will be eligible to earn $4880 a month.

A player must have 3 Credited Seasons or 5 years of service to be eligible for these benefits. In addition, like most retirement plans, there are penalties for receiving benefits before reaching retirement age, and benefits for deferring payment. The NFL's retirement age is 55, though players can start drawing at 45. The amount is also affected by a players' Social Security benefit in that the two do not stack.

Should a retirement age player pass away, benefits pass on to the spouse.

Second Career Savings Plan

Players who opt to save during their career, or take a salary reduction, will receive matching funds from the NFL.

Tuition Assistance Plan

Players who go to school and earn at least a "C" average will be eligible for up to $15k in reimbursement each semester.

88 Plan

Should a former player be diagnosed with ALS, Dementia or Parkinson's Disease, they will be reimbursed for in-patient care (up to $110k per year) and also receive a smaller benefit to pay for at-home convalescence.

Group Insurance

Hardwick will keep his NFL-sponsored health insurance until the end of the league year. After which, he will be eligible for COBRA.

NFL Disability Plan

Should a player suffer a significant permanent injury during the course of playing football, they will be eligible for a greater benefit. In essence, their monthly benefit doubles.

Example: Should it be deemed that Hardwick's neck injury (Cervical spine) constitutes a 25% or more loss of functionality, he would be eligible for this disability.

Gene Upshaw NFL Player Health Reimbursement Account

Similar to the Second Career Savings Plan, players (and their families) have access to this HSA analogue. The NFL will put $25k in the account for each credited season a player has (up to $300k maximum).

Former Player Life Improvement Plan

This plan (limited by a player's current Health insurance) provides a number of quality of life benefits. These run the gamut from joint (knee, hip, etc.) replacements to prescription drug assistance and assisted living care.

Neuro-Cognitive Disability Benefit

Beyond the benefits for Permanent Disability and FPLIP, the NFL provides a pension benefit for impairment of brain and nerve function due football injury. This is more commonly known as the Concussion Benefit. Given the current lawsuits, these benefits are due to change, but currently players can receive up to a doubling of their pension amount depending on the extent of their repetitive brain injury.

Retirement Gifts

The team can award a player a retirement gift of up to $15k. Any Dollar value beyond that counts as salary for Cap purposes.