It didn’t get quite as much attention as the dunk contest or the three-point shootout, but the National Basketball Association quietly announced some major changes to its pensions for former players during the league’s All-Star game in Las Vegas last month.
The NBA, its teams and the National Basketball Players Association announced they are jointly funding a significant increase in the pension benefits paid to players who retired before 1965. The league will also increase the number of former players eligible for pension benefits.
The league and the players’ union have been negotiating to build a more “complete” pension program as a way to reward the league’s pioneer players, according to a statement from the NBA. The new program will increase the pension benefits of pre-1965 players by 50%, kicking their benefits up to $3,600 for every year of service. Instead of a $24,000 payout, a player with 10 years’ service will now be looking at $36,000 each year — just a shade higher than the $35,000 paid to the winner of the dunk contest in February.
Tim Frank, spokesman for the NBA, declined to comment on how, or if, these changes will affect the way the league currently manages its pension plan assets.
It doesn’t seem like the league and its teams should have a problem funding the changes, however. The NBA’s defined benefit plan has about $177 million in assets, according to the Money Market Directory. Put into perspective, the NBA’s 10 highest paid players will earn roughly a combined $190 million this year — $13 million more than its total pension assets.
