NFL Increases Pension Funding Level but Still Lags Behind the NHL

SOA publishes 2018 multiemployer pension plan statistics

Photo: iStock.com/mphillips007

The Society of Actuaries (SOA) has compiled and published 2018 data for multiemployer pension plans in the sports and entertainment fields. Among them are players pension plans sponsored by Major League Baseball (MLB), the National Football League (NFL) and the National Hockey League (NHL), as well as the Directors Guild of America (DGA), the Screen Actors Guild (SAG) and the American Federation of Musicians (AFM).

For each plan, the SOA tabulated pension plan statistics, such as liability and plan funded status, as well as average yearly benefit. Remarkably, only one of these plans is fully funded.

MLB’s pension plan is 87 percent funded, as MLB measures it for funding purposes using a discount rate of 7.00 percent. The NFL’s plan has surged to 89 percent funded, up six points from 2017. The NFL uses a discount rate of 7.25 percent. This is the first year since 2009, when the SOA began tracking it, that the NFL plan has surpassed MLB in funded ratio.1

By comparison, the NHL, which began its players’ pension fund in 2012, has a surplus of funding as of 2018, at 134 percent. The NHL discounts its liabilities at 6.50 percent.

Of the entertainment plans, the DGA pension is the only plan that is 90 percent funded, with a discount rate of 7.15 percent. The Writers Guild, which reached 92 percent funded in 2014, has dropped to 81 percent funded in 2018, using a discount rate of 7.50 percent. The SAG plan, also discounted at 7.50 percent, is 77 percent funded.

The AFM pension plan, which began in 1959, is the least funded of the plans presented, at 59 percent when discounted at 7.50 percent. This is down two percentage points from 2017 and down 24 points over the past five years. The downward movement is in line with the overall trend in the entertainment industry as of 2018.

The SOA also reports the current liability for each organization.2 The NFL and MLB current liabilities are almost equal, at $6.3 billion and $6.4 billion, respectively. The AFM’s current liability is $5.2 billion, while SAG’s current liability is nearly double that, at $10.4 billion. The Motion Picture Industry has the highest current liability, at $11.9 billion. Current liability for all plans is measured at 2.98 percent.

Additional reports have been published for the NBA and the American Federation of Television and Radio Artists. Also available is the Entertainment Industry Pension Plan Funded Status Comparison, which presents data for six plans compared over the past five years.

Multiemployer pension plan statistics were derived from publicly available data reported on Form 5500, which plans file with the Department of Labor.

For more information about these statistics, contact Lisa Schilling, FSA, EA, FCA, MAAA, retirement research actuary for the SOA.

References:

  1. 1. These plans, like most multiemployer pension plans in the U.S., use an expected rate of return to discount liabilities for funding purposes.
  2. 2. Current Liability for multiemployer plans is defined by Internal Revenue Code § 431(c)(6), including the discount rate at which it is computed.

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