Chrysler and the NFL:

What do Chrysler and the NFL have in common? A defined benefits plan and participation in the global economy.

Definitions:
Defined benefit plans "promise(s) you a specified monthly benefit at retirement. The plan may state this promised benefit as an exact dollar amount, such as $100 per month at retirement. Or, more commonly, it may calculate a benefit through a plan formula that considers such factors as salary and service - for example, 1 percent of your average salary for the last 5 years of employment for every year of service with your employer." (Department of Labor - Employee Benefits Security Administration).

The Pension Benefit Guaranty Corporation (PBGC) was created as a result of the passage of the Employee Retirement Income Security Act of 1974 (ERISA).

ERISA was designed to protects the assets of millions of Americans so that funds placed in retirement plans during their working lives will be there when they retire. ERISA does not require any employer to establish a pension plan. It only requires that those who establish plans must meet certain minimum standards. The law generally does not specify how much money a participant must be paid as a benefit. It is dependent upon the terms and conditions of the participant's defined benefits plan.

The Link:
As many of you know, Chrysler and GM are fiscally 'disabled' as a result of the economy and other factors. Both have defined benefits plans that are insured by PBGC under ERISA. The issues at GM and Chrysler may seem far removed from the active and retired player population. There may not seem to be a correlation and impact upon the active and retired players; yet, from an economic standpoint the pension plans of these two multinational corporations does impact the NFL active and retired player benefits.

How? It is dependent upon WHERE the retirement fund invested your retirement dollars. Public corporations that do business globally purchase parts and supplies from a variety of smaller corporations. There is an interdependence in the global enonomy for success. If the retirement fund took a hit based upon the current global economic landscape; then the pension and disability plan took a huge hit also. It is up to the plan administrators to resolve the plan underfunding. Remember, no longer is one national economy independent of another. We are a global economy and community.

In an effort to determine where the NFL's pension and disability plan is heading, the representative from the plan administration in Baltimore was asked at the Retiree Summit if there were plans in the works to resolve the plan underfunding? The plan representative, indicated to a room full of retirees 'no' it was in the "yellow".

Be concerned over the state of your retirement and disability plan. NFL annuitants and disability annuitants need to keep an eye on the state of their pension plan. Resolving the plan underfunding is critical to the health of the retired player's benefits. Attached is a list of various plans that are being monitored or have been taken over by PBGC. US Steel and Pan Am were taken over in the mid 1990's.

PBGC NEWS:
PBGC Seeks Recovery on Behalf of Tom's Foods Inc. Pension Plan (June 11, 2009)
PBGC Assumes Amsterdam Memorial Hospital Pension Plan (June 11, 2009)
Chrysler Pension Plans Continue Under New Company Sponsorship (June 10, 2009)
PBGC Protects Pensions at Milacron Inc. (June 10, 2009)
GM Pension Plans Remain Ongoing During Company Bankruptcy (June 01, 2009)
PBGC Assumes Circuit City Retirement Plan (May 27, 2009)
PBGC Moves to Protect Contech Pension Plan (May 26, 2009)

The NFL Retiree Change Requirements

Where will change most effectively impact the retiree population? How is change most effectively managed when the NFL Retirees do not have an authorized group to negotiate on their behalf?

My Take: Helen L. Horvath, MA, PsyD (Cand), Principal, Founder/CEO, HW Associates

I recently attended the NFL Retiree Summit in Las Vegas, NV. The purpose of the summit was to create the beginning of a grassroots movement for change. The issues surrounding the Summit and the retired players are many; yet, the bottom line is that change must take place or the retirees will be the ones to suffer the most.

The current retirement plan is underfunded in the 2007 and 2008 plan years. This does subject the plan to potential plan take over by the Pension Benefit Guaranty Corporation (http://www.pbgc.gov/) which will pay pennies to the dollar for benefits. Retired and active players should be concerned over the plan underfunding as it does affect both classes of players.

Currently, the NFL Collective Bargaining Agreement is set to be renegotiated beginning in 2009. The benefits of the retirees need to be protected by One Independent Organization that has no ties to the NFLPA or NFL other than the right to use the NFL brand as the logo.

Across the United States there are at least 20 retired players groups that do not have the power and ability that one united organization, without ties to the union, would have. There are too many cooks in the "kitchen" that want to represent the players; each has a separate agenda or product that will benefit the retired players. Each organization has great ideas to benefit the players; yet, there is no true independent representative of the NFL Retired Players groups. It is time to bring each retiree group under one "roof" so that active players who are going to retire will have representation at the table and the current retired population will finally have representation that has a vested interest in THEIR benefits and fiscal sustainability.

How can this be done? The first step is to check personal agendas at any door that you open pertaining to the retiree benefits issue. This is about everyone who is in the game or has retired from the game. If you are not retired from the game you will be or you will potentially leave the game with a disability. Either way you will be affected at some level - so will your team mates.

The second step is to bring the 20+ Retiree Groups together to create one organization and an agenda that has set goals created along with a timeline of completion. Timelines can be adjusted based upon what needs to be accomplished. This agenda is the smaller picture of what was created at the Retiree Summit on May 31, 2009. Remember that there is power in numbers and group cohesion is not easily attained when the kitchen is jam packed with cooks.

It is at this time that the change process can begin along with the lobbying for the change. Players, active and retired, need to unite to change how the NFLPA and NFL handles active and retiree player benefits. It is not enough that Congress has threatened a $6B a year industry with forced reform if change does not take place. Active and retired players need to unite to create the legal vehicle that demands change and allows the retired, and future retired, players a seat at the bargaining table. Even with the recent award by the courts; retired players need to remain active to protect their benefits current and future. They need a voice that is united and looks out for their interests.

For the full debate relating to change management visit us at http://www.hwassociates.us/. Our site will be up and operational June 26, 2009.