August 30, 2011
Authored by: benefitsbclp
Arguably, Major League Baseball (“MLB”) offers one of the best pension and healthcare programs in all of sports. Players vest in their pensions after 43 days on the active roster and just one day qualifies a player for lifetime healthcare. Playing isn’t even a requirement, benchwarmers may qualify for benefits as well. After 43 days, players qualify for the minimum benefit of $34,000 per year and those with 10 years of service receive a pension of approximately $100,000 annually. In 2010, the MLB Players’ Pension Plan reported assets of over $1.3 billion for approximately 8,200 participants.
However, these generous benefits have not always been available. While baseball players first obtained a pension in 1947, some claim the plan was very poor. Pension plan vesting and lifetime healthcare required four years of service. Over the years the MLB Players’ Association negotiated higher benefits and won more concessions in the ’72 and ’81 strikes, including the reduced 43 day pension vesting requirement. But there are 850 former players who retired between 1947 and 1980 with less than four years of service still without pensions or healthcare benefits. In 2002, three of these former players filed a class action lawsuit against MLB demanding pension benefits, but the suit was dismissed.
According to The New York Times, MLB and the Players’ Association recently agreed to provide payments to these former players. Payments may be up to $10,000 annually and will be based on their length of service. While MLB and the Players’ Association have no legal obligation to pay any additional benefits, they agreed to pay these benefits for the next two years and discuss future payments in collective bargaining. According to Bud Selig, “It’s just the right thing to do.”