NFL sacks referees’ retirement security
If you’re a sports fan, chances are that you’ve heard about the standoff between the NFL and its referees. The impasse, resolved on Thursday, resulted in three weeks of officiating by replacement referees who, according to some, fumbled more calls than the players. For many, this would have been the news. However, we at the Pension Rights Center were more concerned about what was at stake in the lockout: the referees’ retirement security.
A key issue in the stalemate was one that many who work in corporate America face today: whether employees – in this case, the referees – would have guaranteed income at retirement or whether their retirement security would be largely dependent on the ups and downs of the stock market. As Deadspin editor Tommy Craggs wrote in Slate, the lockout was part of an “ideological fight…over what it means to be a worker or an employer.”
The NFL locked out its referees in the name of taking away their pensions. It was not that the pensions were a threat to the long-term fiscal survival of the league—again and again, we were reminded that the sums involved were pocket change in a growing, multibillion-dollar enterprise. It was that the pensions existed at all. The mere existence of a defined-benefit retirement plan offended an ownership class that had looked around and seen that every other business owner in America had already broken that particular contract.
It’s worth reading Cragg’s piece in its entirety for its eloquent defense of traditional pensions.
Unfortunately, despite the settlement, the referees still lost. The tentative deal reached between the NFL and the referees closes the referees’ traditional pension plan to new hires immediately. Current referees will continue to participate in the plan through the end of the 2016 football season or until the referee earns 20 years of service. New referees can enroll in a new 401(k) plan and, beginning with the 2017 season, all referees will be offered only the 401(k) plan.
Companies have been freezing or terminating their traditional pension plans for some time. Typically when companies stop their defined benefit plans, they offer a 401(k) plan to their employees, often with the promise of employer contributions. This is the type of arrangement that the NFL and the referees agreed to. However, the employer contributions aren’t required and can be rescinded at the employer’s whim, with little or no reason. Often, employers suspend their contribution during times of financial hardship, just when the people participating in these plans need it the most.
Many fans were happy that a deal between the NFL and the referees had been reached. In a press conference, NFL Commissioner Roger Goodell said the compromise is “the right thing for the game.” But at what cost to the retirement security of the referees?
It’s too bad that our own proposal for Retirement Security Funds, or Senator Tom Harkin’s USA Retirement Funds aren’t yet a reality. As our friends at Dēmos wrote, if NFL referees can't get pension plans, we need a national solution, and these proposals are a great starting point.
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