Message from Ray Schoenke to Retired Players

Dear Fellow Retirees,

I have enjoyed the energy and drive displayed by so many you as we have all attempted to interpret all of the recent events: 1) Gene’s remarks in the Charlotte Observer, 2) the recent Collective Bargaining Agreement, 3) the huge disparity in retirement benefits between what current players are eligible for and what retired players received, 4) the need to bring parity on retirement benefits for all retired players to $425 benefit credit @ age 55, and 5) the desire to have a greater participation in future negotiations. I have participated in many phone calls, read numerous e-mails and chaired a committee for our DC Chapter on Retirement Benefits. I along with everyone else felt Gene’s remarks were out of order. But on closer review understandable. (The good news, his remarks brought many new retired players to the table.) I was pleased with the CBA completion, and with the revenues exceeding $6 billion I assumed taking everyone to $425 monthly benefit credit on our retirement plan was achievable. I listen to other retired players and read the e-mails chastising Gene and the NFLPA about the retirement plan yet when I talked with several players about the retirement plan it became obvious they did not understand it nor were answers forth coming from the NFLPA staff. Therefore I took it upon myself to try to understand the plan since I had some expertise in this area having run a national insurance brokerage firm.

I went to the offices in Baltimore where the Bert Bell/Pete Rozelle/NFL Players Retirement Plan is administered and got a copy of the annual report and the 5500 Tax Return. (Any player who is a plan participant can get this information) I then went to an actuarial firm where one of my former employees worked and with his assistance and a senior partner reviewed the plan. They outlined for me approximate ballpark figures.

While the current plan is under funded it is still in good shape. It has assets of $841 million with liabilities in excess of $900 million or approximately 90% funded. However it became very obvious that to take everyone in the plan to a credited benefit of $425 would nearly double the liability to approximately $1.8 billion. If the NFL/NFLPA were to try to fund this new increase over 20 years, which is a very acceptable funding period, it would take approximately $80 million of new money per year. The CBA doesn’t provide anywhere near this amount of funds (Gene’s remarks confirms this which I discuss later) and if one could get the funding, to recommend to any entity to take on a $ billion liability that would be mostly unfunded is not prudent or practical. In addition you would be committed to fund beyond the CBA contract (6 years) which could greatly jeopardize the plan if a new contract was not secured. Consequently it was easy to conclude that increasing everyone to $425 was a non starter. However, I wanted to have some idea on what it would cost to raise our benefits incrementally. The actuaries conservatively stated that for each $2.50 increase in monthly benefit credit for current retires only the cost would be approximately $1million for 6 years (amortizing the cost over the CBA contract). I urge any of you to go through the same exercise with an FSA or EA actuary. It is critical we get accurate information before we speak.

On May 15 I made our Committee Report to the DC Chapter. Unexpectedly Gene came to the meeting and was enthusiastically welcomed. Because of his presence I decided to cut my remarks so Gene could talk. I might add after hearing his remarks my report will be changed to reflect his comments. I thought his presentation was very good, straight forward with a great deal of give and take. He spoke for about 1 ½ hours. He addressed the comments he made in the Charlotte paper as being taken out of context for him as well as those who criticized him. He added that several called to apologize. He also said his remarks gave the impetus for players who had not been involved to be involved. He explained the negotiating process and who participates. They negotiate salaries and benefits at the same time and he shared how the monies are divided. He said the monies available for increases from the CBA for benefits were $3-4 million per annum per club or around $90 million + with $30 million already committed to a new medical savings plan. In addition there are 15 other line items that could also be considered for increases from the $60 million remaining. Gene stated to increase our benefit to $425 is impossible. (I concur because of the analysis I discussed previously) He said he had just received benefit calculations and would be making recommendations. He was considering increasing the retirement benefit for two of the older groups by 10-20% and 10% respectfully He also mentioned improving widow benefits. There was a good dialogue between Gene and several of us members regarding a more direct role by retired players in the negotiating process. While Gene was very emphatic that a retired player could not serve on the Executive Committee with voting rights the idea of a non voting member representing the retired players was not totally rejected. Over all I thought the exchange was very good.

The following day I met with Doug Allen, Miki Yaras-Davis, and Andre Collins at the NFLPA office for a couple hours. Doug did most of the talking and reiterated what Gene had stated to us the previous evening. However Doug did spend time talking about why the disparity of retirement benefits existed between current and retired players. He also spent time discussing why MLB player’s pensions were better than they were for NFL players in who played in the 60’s and 70’s. The reason was MLB players union during that period achieved “free agency”. Consequently they were in a far more dominant position than the NFLPA. Doug went on to say that once free agency was achieved, the NFLPA benefit package improved dramatically and today far exceeds the MLB players benefit package. He also went on to say it is important to understand that the NFL owners are concern only about the current players not the retired players. (“Out of sight out of mind”) Consequently current players retirement programs for exceed what retired players received. He emphasized the current players make everything possible and therefore they are the most important participant in this equation. He said it didn’t mean they didn’t care about retired players because they are always trying to improve their benefits. Doug did encourage that a strong relationship should exist between the retired players and the Executive Committee. He like Gene felt that a retired player could not serve on the Executive Committee. However also like Gene he did not reject the idea of a non voting retired player serving on the Executive Committee.

Taking all of this information I want to suggest the following goals for consideration: (These recommendations are the final report submitted to the DC Chapter from the Retirement Committee)

1) Seek to get two non voting positions on the Executive Committee. They would be the President and 2^nd highest officer on the Steering Committee.

While an open forum for voting so all retired players could vote would appear to be the best way to select these individuals we however would recommend having members come to the convention and vote there for Steering Committee officers. We feel it is important that we all come to the convention for it shows commitment. It is then up to those attending the convention to decide if the candidates are worthy.

2) Attempt to get the greatest increase possible for our retirement benefits.

Our goal is to get the greatest percentage possible of the $60million available for benefit increases. This has to be based on monies available and importance when compared to other expenditures. For our objectives $20 million a year for 6 years would take everyone who is not at $240 monthly benefit credit to that amount. To take everyone to $260 monthly benefit credit would take $37 million for 6 years and $50 million would take us to $275. These estimates are based on conservative assumptions that include not only retires receiving benefits but also those who have qualified for benefits but have yet to received anything. Gene has already suggested he is considering $20 million expense in our behalf. Will Gene be open to a higher amount? Can we get him to consider us as a greater priority versus other expenditures? What other increases is he considering and how much do they cost and can we get that information?

I realize some of the pension information I have shared with you is difficult to understand. Therefore I would like to suggest we hold a meeting in DC as soon as possible where we can have an actuary and hopefully staff from the NFLPA in attendance to review with anyone who is interested in my conclusions. It would be better if we were more knowledgeable and prepared before the convention. However this certainly could be covered in Arizona.

It is critical that we maintain our momentum and stay together. And as several of you have said we need to take on more responsibility for what is or is not happening.

Ray Schoenke
1963-64 Cowboys
1966-75 Redskins

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