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Decertification + NHL Pension Plan

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Old
11-24-2012, 11:35 PM
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Decertification + NHL Pension Plan

I'm really interested by the effect that decertification would have on the NHL Pension Plan.

I'm not trying to make the mods' lives difficult by starting any unnecessary thread - so if you think this isn't justifiably a separate topic, go ahead and move it (you won't hurt my feelings ) ... but I also think the topic is interesting enough that it warrants separate discussion.

I've seen several members of the media casually say that with decertification there will be "no more pensions"...and this is most certainly incorrect.

The plan itself is a trust (what you'd commonly categorize as a business trust) - and the "Pension Plan" (which is a trust agreement) is the relevant document...not the CBA (you can use a CBA to agree to make amendments to the Plan - but the Plan (I guess, more specifically, the pension itself) is a completely separate vehicle.

I couldn't find the Plan itself online (which isn't surprising...i doubt it's online) - but if anyone can find a copy, post it).

This '09 Ont. SCJ decision after a fight b/w the NHL/NHLPA over pre-retirement death benefits includes some interesting insight into the history of the Plan and some of its content: http://www.canlii.org/en/on/onsc/doc...nlii31609.html

As noted above, any discussion is a bit limited w/o being able to see the Plan - but a couple of questions i have is (1) what would the NHL's immediate funding obligations be - and how would they get out of them, esp. considering the fact there are pension in the US and in Canada (I noticed in the decision that the Cdn pension was registered in Ontario); and (2) assuming that the NHLPA has the right to appoint members to the board of trustees of the plan...what happens if there's no more NHLPA? do you have to go to court to figure it out or is there an easier solution?

Finally - i "read online" that nhl/nhlpa were still disputing pension issues as part of the negotiation - has anyone seen/read what they're arguing about?

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11-24-2012, 11:41 PM
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Pension plans would only affect future players. If you get a pension right now from the NHL, you would not be affected.

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11-24-2012, 11:49 PM
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Quote:
Originally Posted by ScottyBowman View Post
Pension plans would only affect future players. If you get a pension right now from the NHL, you would not be affected.
Precisely my thoughts, too. What I'm also interested in is how easily you can cut off funding obligations re NHL just by decertification. I don't think decertification in and of itself would terminate the NHL's obligations.

Presumably, they're stuck with the terms of the Plan (and the last CBA required amendments to the Plan).

So the NHL's funding obligations would continue???

Pension law is such a scary sub-species of trust law, just b/c of all the obligations involved. You can spend your time dealing with trust-stuff and still find pension law terrifying

ETA: just out of interests sake, i'd love to see how the pension's held, given it appears to be combined dbp and dcp. a chunk of it's going to be annuity-heavy...but i'd like to see (again, out of interest) what they do w/ the rest.

does anyone know who the ontario lawyers and accountants for the plan are?


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11-25-2012, 12:26 AM
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The NHL Pension is a Defined Contribution plan, not a defined benefits one. The NHL makes a pension contribution to a retirement account for each player - the amount is based on whether the player has been credited with more or less than 160 games. The NHLPA also makes contributions (up to 25% of total contribution) from the NHLPA share of revenues from International games. The account is fully vested and controlled by the player.

After decertification, each player would keep their existing account balance - but the NHL would be required to make no further contributions.

Under the '95-'04 CBA, the Pension Plan was also a defined contribution plan - with an add'l Senior Player Benefit that paid the player a projected $250K at age 55. The Senior Player Benefit was eliminated in the 2005 CBA in return for higher regular contributions.

The NHL had a defined benefit pension plan through the '85-'86 season. That was discontined and replaced with a defined contribution one. Under the 1995 CBA, the League purchased annuities for those pre '85-'86 players to cover their accrued benefits under the discontinued defined benefit plan.

The NHL has no future pension obligations.


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Old
11-25-2012, 12:31 AM
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Some of the info the OP is asking about is private. Anyways the above quote is roughly accurate. Now post-decertification, individual players could negotiatie pension contributions as part of their deals but thats not likely to happen unless it was just some back door angle.

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11-25-2012, 12:45 AM
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Quote:
Originally Posted by kdb209 View Post
The NHL Pension is a Defined Contribution plan, not a defined benefits one. The NHL makes a pension contribution to a retirement account for each player - the amount is based on whether the player has been credited with more or less than 160 games. The NHLPA also makes contributions (up to 25% of total contribution) from the NHLPA share of revenues from International games. The account is fully vested and controlled by the player.

After decertification, each player would keep their existing account balance - but the NHL would be required to make no further contributions.

Under the '95-'04 CBA, the Pension Plan was also a defined contribution plan - with an add'l Senior Player Benefit that paid the player a projected $250K at age 55. The Senior Player Benefit was eliminated in the 2005 CBA in return for higher regular contributions.

The NHL had a defined benefit pension plan through the '85-'86 season. That was discontined and replaced with a defined contribution one. Under the 1995 CBA, the League purchased annuities for those pre '85-'86 players to cover their accrued benefits under the discontinued defined benefit plan.

The NHL has no future pension obligations.
are you sure about that? if you are that's cool. i thought there were dbp obligations re the pension - but if there aren't then that's fine...obviously, i don't know the specifics.

Quote:
Originally Posted by DuklaNation View Post
Some of the info the OP is asking about is private. Anyways the above quote is roughly accurate. Now post-decertification, individual players could negotiatie pension contributions as part of their deals but thats not likely to happen unless it was just some back door angle.
i'm not lazy enough to do the walk - and can't justify sending a process server...but if you pull up the file re the Perell decision i linked to, you'd probably find the Plan in the court file. i can't imagine it would be sealed.

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11-25-2012, 12:50 AM
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re: DBP...i just looked at the Perell decision I linked to: http://www.canlii.org/en/on/onsc/doc...nlii31609.html

and at paras. 15, 16 he says

Quote:
A pension plan for NHL players was first introduced in 1947. The trustee and administrator of the plan was originally the National Hockey League Pension Society (“the Society”). The Society, which was replaced by the Board of Trustees in 1999, continues to act as an administrative agent for the Board. The Board of Trustees is now the Trustee and the Administrator of the Pension Plan

[16] The Pension Plan is a defined contribution pension plan with some aspects of a defined benefit plan. See Bathgate v. National Hockey League Pension Society reflex, (1992), 11 O.R. (3d) 449 (Gen. Div.), aff’d 1994 CanLII 1427 (ON CA), (1994), 16 O.R. (3d) 761 (C.A.). The current plan is registered in the Province of Ontario under the Pension Benefits Act, R.S.O. 1990, c. P.8. The plan is also subject to U.S. and Canadian tax laws, as well as, U.S. laws such as the U.S. Employee Retirement Income Security Act of 1974 and the Retirement Equity Act.
so there must be a dbp aspect.

eta - as noted above, the Plan had to have formed part of the file that led to Perell's decision - and there's nothing about that litigation that would have led to a sealing order - so if anyone wants to pay the $150 or whatever it is to order up that court file, i'd assume a copy of the Plan is in it.


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Old
11-25-2012, 01:17 AM
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Quote:
Originally Posted by UsernameWasTaken View Post
re: DBP...i just looked at the Perell decision I linked to: http://www.canlii.org/en/on/onsc/doc...nlii31609.html

and at paras. 15, 16 he says



so there must be a dbp aspect.

eta - as noted above, the Plan had to have formed part of the file that led to Perell's decision - and there's nothing about that litigation that would have led to a sealing order - so if anyone wants to pay the $150 or whatever it is to order up that court file, i'd assume a copy of the Plan is in it.
The Defined Benefit Plan was eliminated after 1986 - with annuities purchased to cover the future benefits due under that plan.

Quote:
Originally Posted by 1995 CBA Article 21
21.2. Basic Plan Benefits.
(a) Each player entitled to a full credited year of service for the 1993/94 playing season and
thereafter shall have allocated and credited to an account established in his name, for his sole benefit, the
following:
(i) for players who have received credit for less than 400 games played, the amount
of $8,000 CDN per year for seasons through 1999/00 and $10,000 CDN per year for the seasons
after the 1999/00 season.

(ii) for players who have received credit for 400 games played or more, the amount
of $12,500 CDN per year for seasons through the 1999/00 season and $15,250 CDN per year for
seasons after the 1999/00 season.
...
21.3. Senior Player Benefits.

(a) In addition to the benefits provided in Sections 21.1 and 21.2, the additional benefit plan
for senior players (set forth in the Pension Plan) shall be continued. The amounts contributed under
such additional benefit for a senior player are, assuming a 10 percent annual return, projected to grow
to a value of $250,000 CDN by the time the player reaches age 55. It is recognized and understood
that this provision shall not be deemed to be a guaranty that a player shall receive $250,000 CDN,
rather such figure is an actuarial estimate based upon the assumptions referred to, and that the actual
amount may vary based upon investment returns realized on such amounts.
...
21.5. Benefits Under Prior CBAs or Pension Plans.
The Pension Plan shall continue to provide for each player entitled to a full credited year
through completion of the 1992-93 playing season all of the benefits set forth in Section 13.01 of the
Collective Bargaining Agreement dated June 1, 1988, as amended by the Memorandum of
Understanding dated January 21, 1993, (i) in the case of players with service through the 1985-86
playing season, through the purchase of annuity contracts issued by Manufacturers Life Insurance
Company providing for the payment of annuities to each player entitled to such benefits, and
(ii) in the
case of players with service after the 1985-86 playing season through the 1992-93 playing season,
through the contributions specified in the applicable Collective Bargaining Agreement or Pension Plan.
That Ontario Superior Court Decision concerned death benefits due for players who played through '85-'86 under the old defined benefits plan.

Quote:
[1] This Application under rule 14.05 (3)(a) of the Rules of Civil Procedure is for the opinion, advice, and direction of the Court about a pre-retirement death benefit in the National Hockey League Players’ Pension Plan. More precisely, the Pension Plan is the 1966 Pension Plan that was restated four times between 1966 and 1987, and the precise benefit in question is the pre-retirement death benefit that is available: (a) for former players of NHL clubs for services between April 30, 1952 and July 1, 1986; and (b) for non-player employees of NHL clubs for services between 1961 and July 1, 1994.

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Old
11-25-2012, 01:33 AM
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Quote:
Originally Posted by kdb209 View Post
The Defined Benefit Plan was eliminated after 1986 - with annuities purchased to cover the future benefits due under that plan.



That Ontario Superior Court Decision concerned death benefits due for players who played through '85-'86 under the old defined benefits plan.
good stuff! thanks so much for that. i should have paid more attention. i really appreciated what you posted..it was clarifying

do you have any idea how they've balanced the plan...investment/annuity-wise?

also...i asked above...does anyone know who rep's the plan legally, re "administrator" and who the accountant is? are the ont. holdings through rbc or someone else? i'm just wondering out of curiosity.

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11-25-2012, 01:48 AM
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What about the pension of long time ago retired players? They apparently stop getting payments in January unless the CBA is resolved.

Their fund is pretty small to begin with from what I know, only 2 M I think. That's pretty embarassing imo, if I was a star fwd earning a tonne then I'd personally add a million to that, be thankful that Ted Lindsay and co even had the balls to make your PA in the first place or you'd be 10-20 yrs behind.

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11-25-2012, 01:56 AM
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Quote:
Originally Posted by QuietCompany View Post
What about the pension of long time ago retired players? They apparently stop getting payments in January unless the CBA is resolved.
Do you have a link to back up that assertion?

For pre-1986 players, the League was to purchase annuities in 1995 to cover those future payment obligations - the current lockout (or any hypothetical decertification) should have no effect on those pensions.

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11-25-2012, 02:08 AM
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Quote:
Originally Posted by kdb209 View Post
Do you have a link to back up that assertion?

For pre-1986 players, the League was to purchase annuities in 1995 to cover those future payment obligations - the current lockout (or any hypothetical decertification) should have no effect on those pensions.
basically what you've said.

...and as i mentioned above...the relevant doc is the Plan.

Do you know to what extent the league's obligations have been covered off by annuities?

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11-25-2012, 02:11 AM
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Of course court docs are public, but those are outdated.

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11-25-2012, 02:12 AM
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Quote:
Originally Posted by UsernameWasTaken View Post
good stuff! thanks so much for that. i should have paid more attention. i really appreciated what you posted..it was clarifying

do you have any idea how they've balanced the plan...investment/annuity-wise?

also...i asked above...does anyone know who rep's the plan legally, re "administrator" and who the accountant is? are the ont. holdings through rbc or someone else? i'm just wondering out of curiosity.
I don't know who administers the plans - but half the trustees that oversee it are appointed by the NHL and the other half by the NHLPA. The NHLPA is responsible for selecting the plan administrators and legal counsel. The plan trustees decide on the set of available investment finds and then the players make their own investment decisions from those fund options.

There are actually two separate pension plans - the "National Hockey League Players' Pension Plan", for players on Canadian teams with contributions made in $CDN , and the "National Hockey League Pension Plan for Players of United States Member Clubs", for players on US teams with contributions made in $US.

For players with less than 160 games, the defined contribution is specified in $CDN, for players with 160+ games, the defined contribution is specified in $US - with appropriate currency conversions done "based on a conversion rate equal to the average currency exchange rate during the season.".


Last edited by kdb209: 11-25-2012 at 02:21 AM.
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11-25-2012, 02:22 AM
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Quote:
Originally Posted by kdb209 View Post
Do you have a link to back up that assertion?

For pre-1986 players, the League was to purchase annuities in 1995 to cover those future payment obligations - the current lockout (or any hypothetical decertification) should have no effect on those pensions.
http://www.thestar.com/sports/hockey...of-lockout-cox

Don't know about the future or about January, but according to them, they've stopped getting their checks on September 15.

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11-25-2012, 02:23 AM
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Quote:
Originally Posted by kdb209 View Post
I don't know who administers the plans - but half the trustees that oversee it are appointed by the NHL and the other half by the NHLPA. The NHLPA is responsible for selecting the plan administrators and legal counsel. The plan trustees decide on the set of available investment finds and then the players make their own investment decisions from those fund options.

There are actually two separate pension plans - the "National Hockey League Players' Pension Plan", for players on Canadian teams with contributions made in $CDN , and the "National Hockey League Pension Plan for Players of United States Member Clubs", for players on US teams with contributions made in $US.

For players with less than 160 games, the defined contribution is specified in $CDN, for players with 160+ games, the defined contribution is specified in $US - with appropriate currency conversions done "based on a conversion rate equal to the average currency exchange rate during the season.".
As an aside, your contributions to this thread have been invaluable.

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11-25-2012, 02:32 AM
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Quote:
Originally Posted by kdb209 View Post
I don't know who administers the plans - but half the trustees that oversee it are appointed by the NHL and the other half by the NHLPA. The NHLPA is responsible for selecting the plan administrators and legal counsel. The plan trustees decide on the set of available investment finds and then the players make their own investment decisions from those fund options.

There are actually two separate pension plans - the "National Hockey League Players' Pension Plan", for players on Canadian teams with contributions made in $CDN , and the "National Hockey League Pension Plan for Players of United States Member Clubs", for players on US teams with contributions made in $US.

For players with less than 160 games, the defined contribution is specified in $CDN, for players with 160+ games, the defined contribution is specified in $US - with appropriate currency conversions done "based on a conversion rate equal to the average currency exchange rate during the season.".
again, i don't know a ton - but i thought the set up was the board of trustees were the trustee + the administrator. but

re: the prof advisors...i was just wondering, in a traffic watching sense, which firms were providing the prof advice, etc.

Quote:
Originally Posted by billybudd View Post
As an aside, your contributions to this thread have been invaluable.

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11-25-2012, 02:43 AM
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Quote:
Originally Posted by billybudd View Post
http://www.thestar.com/sports/hockey...of-lockout-cox

Don't know about the future or about January, but according to them, they've stopped getting their checks on September 15.
Contributions and benefits under the Senior Player Benefits part of the pension plan were discontinued in 2005. Benefits for older players should have been paid from the investment funds of earlier contributions.

Quote:
Originally Posted by 1995 CBA
21.3. Senior Player Benefits.

(a) In addition to the benefits provided in Sections 21.1 and 21.2, the additional benefit plan
for senior players (set forth in the Pension Plan) shall be continued. The amounts contributed under
such additional benefit for a senior player are, assuming a 10 percent annual return, projected to grow
to a value of $250,000 CDN by the time the player reaches age 55. It is recognized and understood
that this provision shall not be deemed to be a guaranty that a player shall receive $250,000 CDN,
rather such figure is an actuarial estimate based upon the assumptions referred to, and that the actual
amount may vary based upon investment returns realized on such amounts.

(b) For seasons after 1999/00, the contributions made pursuant to this Section 21.3 shall be
25 percent greater than the amounts that otherwise would have been calculated and contributed
pursuant to Section 21.3(a) above.

(c) Additional terms and provisions applicable to the contributions and benefits described in
this Section 21.3 shall be set forth in the Pension Plan. The Clubs agree that they will make the
contributions and allocations necessary to provide the benefits as set forth therein.
Quote:
Originally Posted by 2005 CBA
21.4 Senior Player Benefits.
Effective with the 2005/06 season, contributions to the Senior Player Plan
shall be eliminated as a result of the increased Basic Plan contributions.
I don't know the details of the pension terms of earlier CBAs - but under US law (ERISA) an employer can only terminate a pension plan under a limited set of circumstances - typically when the liabilities of a plan exceed it's assets - and in those cases the pensions are guaranteed (up to certain limits) by the PBGC (Pension Benefits Guarantee Corporation). I can't speak to pension plan terminations or guarantees in Canada.

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11-25-2012, 03:07 AM
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Quote:
Originally Posted by kdb209 View Post
Contributions and benefits under the Senior Player Benefits part of the pension plan were discontinued in 2005. Benefits for older players should have been paid from the investment funds of earlier contributions.
No, the thing the Star article is referring to is the letter agreement of July 22, 2005 (p. 430 of the CBA.) The league and PA both agreed to put $1m annually into a fund to supplement pensions for "senior retired players", although the letter doesn't define that term or provide more details. So with no CBA, apparently that money's gone, and, as Cox points out, there's been no mention of it being reinstated in the new deal.

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11-25-2012, 07:45 AM
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Quote:
Originally Posted by billybudd View Post
http://www.thestar.com/sports/hockey...of-lockout-cox

Don't know about the future or about January, but according to them, they've stopped getting their checks on September 15.
This sounds like something extra on top of the hockey pension. It's referred to as " Senior Benefit Plan". From the article it sounds like it is not guaranteed.

In Canada in addition to a company pension you receive the Canada Pension Plan, the Old Age Security plan and for low income there is an additional Guaranteed Income Supplement. Some of the provinces have HST rebates too. In addition if your net income from all these sources falls below $22,000 Medical Services premiums are free. http://www.health.gov.bc.ca/msp/infoben/premium.html

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11-25-2012, 09:33 AM
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"Meanwhile, because courts have held that union decertification alone does not terminate an employer’s obligations to fund a previously established pension plan, current players also do not risk immediate harm to retirees by dissolving the union. See Central States v. Schilli Corp., 420 F.3d 663 (7th Cir. 2005) (holding that employers must generally continue to contribute to a pension fund even after union decertification, at least until the employer satisfies ERISA’s requirements for terminating its obligations to the pension fund)."

http://papers.ssrn.com/sol3/papers.c...act_id=1978517

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11-25-2012, 09:47 AM
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I always chuckle when I hear the major 4 sports leagues talk about current players and a pension plan.

Sure it was needed back in the day when players weren't compensated like they are today but considering the millions of dollars a player earns today, do they really need those relatively pithy payments in retirement?

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11-25-2012, 01:44 PM
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Quote:
Originally Posted by Lard_Lad View Post
No, the thing the Star article is referring to is the letter agreement of July 22, 2005 (p. 430 of the CBA.) The league and PA both agreed to put $1m annually into a fund to supplement pensions for "senior retired players", although the letter doesn't define that term or provide more details. So with no CBA, apparently that money's gone, and, as Cox points out, there's been no mention of it being reinstated in the new deal.
Thanks. I don't always check the Exhibits and it didn't come up with a text search on Pension - because it is NOT part of the pension plans or a legal pension committment.
Quote:
This Letter Agreement is a supplement to the Collective Bargaining Agreement
("CBA"), dated as of July 22, 2005, is incorporated therein and sets forth our agreement
regarding the commitment of monies to supplement the retirement benefits of Senior
Retired NHL Players.

The parties agree that they will establish a fund for the benefit of Senior Retired
NHL Players, and that in each League Year beginning with the 2005-06 League Year,
both the NHL and NHLPA shall make matching $1 million contributions into such fund.
The parties further agree that, neither the monies paid into such fund by the League, nor
the monies paid into such fund by the NHLPA, shall be considered "Benefits" as such
term is defined in Section 50.3(a) of the CBA, and such monies shall not count toward
League-wide Players' Compensation in any League Year.
That supplementary funding was a voluntary committment on the part of the NHL & NHLPA under the expired CBA - there was no further obligation after the CBA expired.



Quote:
Originally Posted by Erik Estrada View Post
"Meanwhile, because courts have held that union decertification alone does not terminate an employer’s obligations to fund a previously established pension plan, current players also do not risk immediate harm to retirees by dissolving the union. See Central States v. Schilli Corp., 420 F.3d 663 (7th Cir. 2005) (holding that employers must generally continue to contribute to a pension fund even after union decertification, at least until the employer satisfies ERISA’s requirements for terminating its obligations to the pension fund)."

http://papers.ssrn.com/sol3/papers.c...act_id=1978517
This isn't relevant - because this funding was not part of a pension plan. Laws concerning continuing pension obligations and pension guarantees do not apply in this case.

Basically, the Senior Players who were receiving money through this supplementary fund are SOL - with both the NHL & NHLPA (who were equally funding it) equally to blame.

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11-25-2012, 05:06 PM
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Quote:
Originally Posted by kdb209 View Post
That supplementary funding was a voluntary committment on the part of the NHL & NHLPA under the expired CBA - there was no further obligation after the CBA expired.
Yup, it was basically the "sorry the old owners and Alan Eagleson screwed you guys so hard, here's some of our spare change so you don't have to eat dog food during your golden years" fund. Sad that they wouldn't continue to make the contributions even with the CBA gone, seeing as they amount to about $35000 annually per owner and $1500 per current player.

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11-25-2012, 06:01 PM
  #25
Orrthebest
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2 interesting sections from previous CBA:

21.1 General. The Pension benefits are set forth in the National Hockey League
Players' Pension Plan, Amended and Restated effective August 26, 1999, and as
subsequently amended, and the National Hockey League Pension Plan for Players of
United States Member Clubs, effective July 1, 2001, and as subsequently amended. The
National Hockey League Players' Pension Plan and the National Hockey League Pension
Plan for Players of United States Member Clubs (collectively the "Pension Plans"), shall
be amended to the extent necessary so as to provide the benefits set forth in this Article
21. The NHL agrees that at all times at least one-half of the trustees comprising each of
the two boards of trustees that act as the administrators of the National Hockey League
Players' Pension Plan and the National Hockey League Pension Plan for Players of
United States Member Clubs shall be appointed by the NHLPA from among its active
members or their designated representatives. The NHL will appoint the remaining
trustees. The NHLPA shall have the authority to designate the legal counsel, plan
administrator, recordkeeper and other consultants retained with respect to the Pension
Plans as outlined in Section 50.3



(b) The NHLPA shall be obligated to contribute one-fourth of the abovespecified
amounts from the NHLPA's share of the proceeds from international hockey, to
the extent that the NHLPA's proceeds are sufficient to satisfy this obligation. In the event
that the principal amount of the proceeds, not including any interest thereon, is
insufficient in any year to meet this obligation, any deficiency shall be paid by the Clubs,
provided that such deficiency shall be repaid to the Clubs out of future proceeds during
the term of this Agreement. To the extent that any deficiency remains unpaid on the date
of termination of this Agreement, it shall be canceled and the NHLPA shall have no
obligation to repay or to provide for the repayment of any such remaining deficiency.


Not to nit pick but how are these possible with no NHLPA?

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