CI Commentary – Settlement Between NFL and Refs Another Hit for Pension Plans

by on Sep 27, 2012

Drew Maresca is the Senior Analyst for Corporate Insight’s New Retirement Plan Monitor research service.

As you football fans out there already know, the NFLRA (National Football League Referees Association) has been engaged in a bitter labor dispute with the NFL that has forced the league to use replacement refs for the first three weeks of regular season games. The replacement referees have been much maligned for their questionable calls and game management. The situation came to a head this past Monday, when a blown call determined the outcome of the Monday Night Football game. Fortunately, an agreement has since been reached between the league and NFLRA to get the regular refs back to work starting tonight.

So what was the cause of this labor strife? Clearly there were numerous points of contention in the negotiations; however, one of the key issues was a philosophical difference regarding retirement plans. The referees preferred to retain their long-standing pension plan, while the NFL pushed for a switch to a 401(k) plan.

In the end, the NFL referees, like the vast majority of American workers, were forced to compromise and accept a switch to 401(k) plans. As part of the compromise, tenured referees will keep their pensions through 2016. New referees will only receive a 401(k) and are not eligible to participate in the league’s pension plan.

The public battle between the league and its referees over retirement plans is indicative of the shift toward defined contribution plans, which began more than a generation ago. Despite possessing great leverage and public support, NFL referees couldn’t retain their pension plans. The recent spat between the NFL and its refs reinforces what many of us already know: much like kickoffs from the 30-yard line, pension plans are a thing of the past.