Ref pension (1 Viewer)

[BigSteelThrill]

"Other people lost their defined benefit plan, so the refs should as well" is not an argument, and not a good reasons to take the side of the NFL in this debate. What the hell happened to the ideals of collective bargaining and fair compensation that your parents and grandparents worked so hard for in the first half of last century?

How the hell can you side with the NFL, a 9 billion dollar organization, just because other industries and companies are screwing people out of their retirements? the whole point of a defined benefit retirement package is that it takes the considerable market risk off of the retiree, who has little income and limited ability to go back to work if need be, and puts it on a corporate entity that doesn't age, doesn't get sick, and has a much, much larger capacity to handle risk and absorb market fluctuations. Makes sense to me.

To besmirch unionized workers a defined benefit pension is idiotic and un-American. The middle class was built on organized labor and people are letting it slip away. It makes sense for a union to capitulate to lower compensation when their company isn't doing well, since ultimately the company and the union are working together. But the NFL is doing great; why shouldn't the refs get a piece of that?

Wake up. Stop bashing organized labor, and stop bashing defined benefit pensions. You're like the kid at the playground that breaks his toy and so gets mad and breaks some other kids toy. Unions are not the enemy.

Right. Our grandparents fought for the tried and true American right to get paid $200K/yr with a full pension for part-time work.

Ironically, most Americans wouldn't even consider these referees middle class anyway.

The fought to have a better earning wages (ability to support a family) then we do, that's for damn sure.

 

[Modog814]

It's pretty funny to me to see people bashing the union here. This is how the market works, it's a negotiation, and you'd all be doing the same thing if you were in their shoes. It will work itself out one way or the other.

That being said, this isn't them asking for a new pension plan, this is them wanting to keep their existing plan in place, while agreeing to have new hires only have the 401K type plan. The NFL wants to end their existing pension plan entirely. There are also other differences, such as the amount contributed, but that's the gist of the pension/401k debate.

Something tells me most of you would be singing a different tune if this was your employer doing this, or if it was a public union like teachers, etc. I'm not a big fan of unions in general, and I think pension plans are very risky for the employer. However, I have no problem with what they are doing here.

Lost 2 pension plans, I have no sympathy for them with the pension Of course I didn't want to lose them but we are not union. So my option was to quit The pension doesn't go away, they still will have the money earned and frozen. Future contributions will be in the DC plan.

They can choose to leave the DB plan and cash that out upon retirement if they so choose, take cash equivalent now, or convert. SO they are not taking away all the money

Many, many plans transfered from DB to DC. The money doesn't disappear, and the company is still responsible for the money accrued. It's a different economic world where have a DB plan could actually bankrupt a company. There is no need to take that risk if your the NFL. And a lot of cities/towns/states are in financial trouble because they can't afford to make the contributions to DB plans where unions have refused to switch.

I don't blame the union, or any, it's there purpose. But there is a risk that they get nothing, if there is no money.

IMO, the main reasons for switching from a DB plan to a DC plan are: (i) investment risk shifted to participants, (ii) changes to the laws governing DB plans (pension "protection" act), (iv) current interest rate environment, and (iv) ease of understanding a DC plan versus a DB plan.Given the current market and interest rate environments, why would any employer want to take on a potentially huge liability when they have an opportunity to mitigate long-term volatility. At least with a DC plan, they can dictate what the participants will receive.

100% correct. It's a no brainer from a corporation side. But from a employee side, you wouldn't want any of the risk either.

 

[RCon]

100% correct. It's a no brainer from a corporation side. But from a employee side, you wouldn't want any of the risk either.

Yes, I would much prefer that someone else take the risk that my savings won't be enough for my retirement. If you or anyone else would like to volunteer to take on my risk, that would be cool.

 

[Modog814]

100% correct. It's a no brainer from a corporation side. But from a employee side, you wouldn't want any of the risk either.

Yes, I would much prefer that someone else take the risk that my savings won't be enough for my retirement. If you or anyone else would like to volunteer to take on my risk, that would be cool.

Exactly. You can see why it's a sticking point in negotiations. After what we've seen the past 5 to 10 years, who in their right minds would want that risk? But at least if the Refs had the risk, they can more easily mitigate it by investment selection. As a DB plan, its much harder to balance risk appetite with a required return (if you're too safe and fail to meet the assumed return, you need to pay more to make up for it, if you're too agressive you risk a market collapse and need to pay more to make up for it). And BTW, conversion to a DC plan doesn't have to be a bad thing. It could be a good thing if the markets do well, your ending balance isn't capped the way it is on the DB side.

 

[CBower4545]

I really don't get people supporting the NFL here. As a fan of the NFL, and consumer of NFL products, I don't care about what the Refs deserve or don't deserve. What I care about is the product that I watch. As a fan and customer, I feel I am owed better then what I have been given and the NFL bares the responsibility for that. The rest of the argument doesn't matter to me. Nothing about giving them a pension plan deal will impact the NFL's long-term financial stability, so get it done. If your cable company gave you intermittent access to TV, or a fuzzy picture, would you care about the labor dispute behind it?

 

[FreeBaGeL]

I really don't get people supporting the NFL here. As a fan of the NFL, and consumer of NFL products, I don't care about what the Refs deserve or don't deserve. What I care about is the product that I watch.

That's exactly why I support the NFL in this. NFL referee'ing has been putrid for the last decade and it gets worse every year. The NFL wants to institute things to make it better and the refs are fighting against those very things.As a consumer that cares about the product I watch, I'd much rather see the D1 refs step up with some working full-time and with everyone accountable for their goof-ups on a week-to-week basis than I would the regular refs continue doing a subpar job with no sign of reform in site.

 

[Patroclus]

"Other people lost their defined benefit plan, so the refs should as well" is not an argument, and not a good reasons to take the side of the NFL in this debate. What the hell happened to the ideals of collective bargaining and fair compensation that your parents and grandparents worked so hard for in the first half of last century?

How the hell can you side with the NFL, a 9 billion dollar organization, just because other industries and companies are screwing people out of their retirements? the whole point of a defined benefit retirement package is that it takes the considerable market risk off of the retiree, who has little income and limited ability to go back to work if need be, and puts it on a corporate entity that doesn't age, doesn't get sick, and has a much, much larger capacity to handle risk and absorb market fluctuations. Makes sense to me.

To besmirch unionized workers a defined benefit pension is idiotic and un-American. The middle class was built on organized labor and people are letting it slip away. It makes sense for a union to capitulate to lower compensation when their company isn't doing well, since ultimately the company and the union are working together. But the NFL is doing great; why shouldn't the refs get a piece of that?

Wake up. Stop bashing organized labor, and stop bashing defined benefit pensions. You're like the kid at the playground that breaks his toy and so gets mad and breaks some other kids toy. Unions are not the enemy.

They should get benefits in line with what they do. Not in line with who they work for. I never understood the argument about how much money the NFL makes. If anything the replacement refs have shown they aren't worth the sort of "Cadillac" package they have asked for. When you can bring high school refs in with almost 0 training and they perform at say 75-90% of the regular refs then maybe the regular refs are not worth what they are asking.

The question is, how much value is that extra 25% worth? As we saw this weekend it's not insignificant. What's a wrongly decided game worth? What's the damage to the brand going to cost?The Refs think the value they add is worth the money in dispute. The league said it wasn't. From the timing of the agreement I suspect the league may be the one that changed their mind.

But it's not 25%. That's my point. They didn't take the next best refs available. Those were all locked to the major college programs. They scraped the bottom of the barrel here. And are getting ok performance. Maybe these refs aren't worth what they think they are.

 

[Short Corner]

I know someone is a lot more familiar with this issue than I am so I am hoping I can get some help with the math. From PFT:

"...the larger issue remains the pension plan. The officials want the NFL to contribute tens of thousands of dollars a year per official toward their pensions, and the owners are adamant that there’s no way they’re spending that kind of money on pensions for part-time workers."

How many officials are there? 16 crews of 7? 8?

How much is "tens of thousands"? 30k, 60k, 90k?

Just as a guess until someone chimes in with accurate data lets say 16 crews of 7 officials plus an alternate; 16 x 8 = 128

An I'll just throw out the number 60k per year the refs want going into their pension; 128 x $60k = $7.68m

$7.68m / 32 teams = $240k per team per year

Is that even close right?

I'm not an expert on this specific situation, but I am an actuary who has had some experience with Defined Benefit Plans. As far as I can tell, The ref union has and wants to retain a Defined Benefit (DB) plan. The NFL wants to move them to a Defined Contribution (DC) plan. The movement from a DB to a DC plan is common place in most industries. In fact most plans that continue to be DB are union plans.

The difference:

DB is exactly what is says. A defined benefit. It generally refers to a x% of salary annually at retirement. The company (in this case the NFL) pays money into the fund annually to fund this obligation. The money is assumed to grow as a specific percentage. A fund is said to be fully funded when assuming that average return, there will be enough money to pay off all obligations.

A DC plan is also exactly what it says. A defined contribution. It generally says, the NFL will stll pay money into the fund annually. The difference is that they don't have a specific obligation to pay a specific amount of money at retirement.

There are several key differences between the 2:

1) Market risk is on the NFL in the DB plan. If the stock market doesn't meet it's expected return, the NFL has to make up for the difference. This of course works both ways, if the stock market over performs, it means the NFL can make less contributions in future years. In a DC plan, the market risk is on the Refs.

2) In a DB plan, the refs can not add any money to the pot. In a DC plan, the refs may add some tax deferred salary to their account (this is 401k feature).

3) In a DB plan, it's all one big pile of money. Not separate accounts. Meaning once the moneys gone, its gone. Of course, for this to happen, the NFL would have to file for some sort of bankruptcy (or face lawsuits), so it's unlikey to happen and even if it does, there are some governmental insurances similar to the FDIC. In a DC plan, it's separate accounts, so each ref would get statement showing exactly how much they have.

4) And because of #3, generally the referees in a DC plan will be allowed to choose their investments, while they won't be able to in a DB plan.

There are more differences, but I think this covers the important ones.

So it's hard to say how much the NFL has to contribute annually in a DB plan because it changes annually. As a quick example, say at the end of 10 years the NFL needs $12.58 in the fund to pay for obligations. It has 0 now. It can put $1 away a year and earn 5% annually to get to the $12.58, so the cost (ignoring devaluation of money over 10 years) is $10. Say it only realized 2% annually, at the end of 10 years it only has 10.95, so it's 1.63 short. So the cost is 11.63, or 16.3% higher. Not too bad.

But what happens if in year 9, the market crashes and they lose 50% of the fund. They now have 5.88, and still need to get to the $12.58. So another $6.70 into the pot, which is 67% increase in funding. On the flip side, if the market jumps up 50% in year 9, the nfl doesn't pocket the extra, they use it to offset future contributions.

They want to get rid of this uncertainty and put it on the referee's. Where they at least get the option to take conservative investments if they desire it. In a DB plan, the NFL has to keep a certain agressiveness to get the assumed 5% return.

From the referees perspective a DB plan is certainly better. From the NFL, a DC plan is certianly better. And by the way, switching plans doesn't mean that the NFL won't pay the same expected contributions in annually. It's really just about the transfer of the market risk from one party to another.

if this is what happened to the shark pool, I like it.I didn't follow the story, but isn't this what happened to united airline workers -- they were on a db plan that got wiped out when the market crashed?

And to CALPERS as well IIRC.

 

[Go DC Yourself]

"Other people lost their defined benefit plan, so the refs should as well" is not an argument, and not a good reasons to take the side of the NFL in this debate. What the hell happened to the ideals of collective bargaining and fair compensation that your parents and grandparents worked so hard for in the first half of last century?

How the hell can you side with the NFL, a 9 billion dollar organization, just because other industries and companies are screwing people out of their retirements? the whole point of a defined benefit retirement package is that it takes the considerable market risk off of the retiree, who has little income and limited ability to go back to work if need be, and puts it on a corporate entity that doesn't age, doesn't get sick, and has a much, much larger capacity to handle risk and absorb market fluctuations. Makes sense to me.

To besmirch unionized workers a defined benefit pension is idiotic and un-American. The middle class was built on organized labor and people are letting it slip away. It makes sense for a union to capitulate to lower compensation when their company isn't doing well, since ultimately the company and the union are working together. But the NFL is doing great; why shouldn't the refs get a piece of that?

Wake up. Stop bashing organized labor, and stop bashing defined benefit pensions. You're like the kid at the playground that breaks his toy and so gets mad and breaks some other kids toy. Unions are not the enemy.

They should get benefits in line with what they do. Not in line with who they work for. I never understood the argument about how much money the NFL makes. If anything the replacement refs have shown they aren't worth the sort of "Cadillac" package they have asked for. When you can bring high school refs in with almost 0 training and they perform at say 75-90% of the regular refs then maybe the regular refs are not worth what they are asking.

The question is, how much value is that extra 25% worth? As we saw this weekend it's not insignificant. What's a wrongly decided game worth? What's the damage to the brand going to cost?The Refs think the value they add is worth the money in dispute. The league said it wasn't. From the timing of the agreement I suspect the league may be the one that changed their mind.

But it's not 25%. That's my point. They didn't take the next best refs available. Those were all locked to the major college programs. They scraped the bottom of the barrel here. And are getting ok performance. Maybe these refs aren't worth what they think they are.

If the NFL can't or won't, for whatever reason, buy the services of the best college refs, that means they are not available. I imagine that figured in the NFL refs bargaining strategy.

 

[RCon]

100% correct. It's a no brainer from a corporation side. But from a employee side, you wouldn't want any of the risk either.

Yes, I would much prefer that someone else take the risk that my savings won't be enough for my retirement. If you or anyone else would like to volunteer to take on my risk, that would be cool.

Exactly. You can see why it's a sticking point in negotiations. After what we've seen the past 5 to 10 years, who in their right minds would want that risk? But at least if the Refs had the risk, they can more easily mitigate it by investment selection. As a DB plan, its much harder to balance risk appetite with a required return (if you're too safe and fail to meet the assumed return, you need to pay more to make up for it, if you're too agressive you risk a market collapse and need to pay more to make up for it). And BTW, conversion to a DC plan doesn't have to be a bad thing. It could be a good thing if the markets do well, your ending balance isn't capped the way it is on the DB side.

Agreed. What I don't understand is why some people (in this case, the NFL refs) expect someone else to take on their risk. I would love it if someone else would take on my risk, but I don't expect it. It's my retirement, so it's my risk to bear.

 

[RCon]

"Other people lost their defined benefit plan, so the refs should as well" is not an argument, and not a good reasons to take the side of the NFL in this debate. What the hell happened to the ideals of collective bargaining and fair compensation that your parents and grandparents worked so hard for in the first half of last century?

How the hell can you side with the NFL, a 9 billion dollar organization, just because other industries and companies are screwing people out of their retirements? the whole point of a defined benefit retirement package is that it takes the considerable market risk off of the retiree, who has little income and limited ability to go back to work if need be, and puts it on a corporate entity that doesn't age, doesn't get sick, and has a much, much larger capacity to handle risk and absorb market fluctuations. Makes sense to me.

To besmirch unionized workers a defined benefit pension is idiotic and un-American. The middle class was built on organized labor and people are letting it slip away. It makes sense for a union to capitulate to lower compensation when their company isn't doing well, since ultimately the company and the union are working together. But the NFL is doing great; why shouldn't the refs get a piece of that?

Wake up. Stop bashing organized labor, and stop bashing defined benefit pensions. You're like the kid at the playground that breaks his toy and so gets mad and breaks some other kids toy. Unions are not the enemy.

They should get benefits in line with what they do. Not in line with who they work for. I never understood the argument about how much money the NFL makes. If anything the replacement refs have shown they aren't worth the sort of "Cadillac" package they have asked for. When you can bring high school refs in with almost 0 training and they perform at say 75-90% of the regular refs then maybe the regular refs are not worth what they are asking.

The question is, how much value is that extra 25% worth? As we saw this weekend it's not insignificant. What's a wrongly decided game worth? What's the damage to the brand going to cost?The Refs think the value they add is worth the money in dispute. The league said it wasn't. From the timing of the agreement I suspect the league may be the one that changed their mind.

But it's not 25%. That's my point. They didn't take the next best refs available. Those were all locked to the major college programs. They scraped the bottom of the barrel here. And are getting ok performance. Maybe these refs aren't worth what they think they are.

If the NFL can't or won't, for whatever reason, buy the services of the best college refs, that means they are not available. I imagine that figured in the NFL refs bargaining strategy.

If the NFL fired all their current refs and offered full-time gigs to the best college refs, they'd all sign up in a heartbeat. The issue here is that the best college refs have a choice between their current gigs or a temporary NFL gig for a couple weeks. They'd be crazy to take a couple weeks of NFL and then not be able to go back to their D1 college job for the next 10 years.

 

[dollarbill13]

If the NFL goes bankrupt due to defined benefit plans, it will be from the players' plan, not the refs' plan.

 

[FreeBaGeL]

If the NFL can't or won't, for whatever reason, buy the services of the best college refs, that means they are not available. I imagine that figured in the NFL refs bargaining strategy.

The NFL was blocked from getting the college refs by the current NFL refs. If the NFL refs are let go, that will no longer be an issue.