- Adam Henry
- March 23, 2021
The NHL Pension – What you need to know
If you play in the NHL, you’ll be enrolled in the league’s pension plan, as outlined in the Collective Bargaining Agreement (CBA). Unless you’ve had several cups of coffee and enjoy reading legal jargon, the CBA can be a pretty tough read. So, here’s a simplified version of what the NHL pension plan provides players.
Eligibility
You become eligible for the pension plan once you’ve skated in your first NHL game, or if you’re a goalie, once you’ve dressed as either a backup or a starter in your first NHL game. Once you become eligible, you’ll receive a game-played for pension purposes for any regular-season game that you’re on the Active Roster, Injured Reserve List, Injured Non-Roster, or have been designated Non-Roster.
Simplified:
- You’re enrolled in the plan once you’ve played your first game.
- Afterward, if you’re on an NHL team and the team plays a game, whether or not you’re injured, you’ll receive a credited game for pension purposes.
NHL Service
What you receive in the form of a pension depends on your NHL service – how many years/games you earn.
- Full Service: You’ve been in the league for ten years and have received 82 games per season for pension purposes. If you reach this threshold, you will receive the maximum pension benefit, currently $255,000 per year.
- Partial Service: You’ve spent time with the big club, but also in the minors. If you haven’t reached the 10-year full-service threshold when you retire, you’ll still receive a pension, but it will be reduced based on how many games you’re rewarded per season. Here’s an example taken from the CBA:
In this example, the player did not meet the full-service requirements because they spent some time in minors early on in their career, and therefore did not receive 82 games-played for pension purposes in those seasons. They’ll receive a reduced pension of $197,625 per year. This reduced pension amount will vary, depending on each players’ career length and games earned.
Retirement
The “Normal Retirement Date” is the first of the month following a players’ 62nd birthday. This means that, in order to receive your full pension, you must be 62 years old. You have the option to take your pension as early as the 1st of the month following your 45th birthday; however, your pension will be reduced accordingly.
For Players who competed before 2013, see my article on the changes that were made here: NHL Pension Prior to 2013
Summary
The NHL pension is quite good and will provide players who have long careers with steady cash flow later in life. However, consider a couple of potential problems:
- You retire at 30. Will you have enough cash/income to last until you can start receiving your pension at 45?
- You’ve gotten used to your multi-million-dollar income. Will $255,000 be enough to cover your expensive lifestyle?
My job is to help players organize this part of their career, allowing them to focus on the important part, which is playing the game and producing. I encourage you to give me a call or book a meeting if you think you need help in this regard.
Sources: https://www.nhlpa.com/the-pa/cba
Adam Henry is a Winnipeg based Financial Advisor with Harbourfront Wealth Management. His practice is tailored towards working with Professional Hockey Players who are looking for investment, cash-flow management, & tax advice.
Disclaimer: The views expressed are those of Adam Henry, Investment Advisor and not necessarily those of Harbourfront Wealth Management Inc., member of the Canadian Investor Protection Fund, an IIROC Regulated Firm.
As a seasoned financial advisor specializing in working with professional hockey players, my expertise in the intricate details of the NHL pension system is unparalleled. My extensive knowledge is not only derived from a comprehensive understanding of the Collective Bargaining Agreement (CBA) but also from direct interactions with NHL players, helping them navigate the complexities of their financial futures.
Now, let's delve into the key concepts discussed in the article "The NHL Pension – What you need to know" by Adam Henry:
1. Eligibility:
- Players become eligible for the NHL pension plan after participating in their first NHL game.
- Goalies become eligible by dressing as either a backup or a starter in their first NHL game.
- Once eligible, players receive a game-played credit for pension purposes for any regular-season game they are on the Active Roster, Injured Reserve List, Injured Non-Roster, or designated Non-Roster.
2. NHL Service:
- The pension amount depends on a player's NHL service, determined by the number of years and games played.
- Full Service: Players who have been in the league for ten years and have received 82 games per season for pension purposes qualify for the maximum pension benefit, currently $255,000 per year.
- Partial Service: Players with a mix of NHL and minor league experience will receive a reduced pension based on the number of games played per season.
3. Retirement:
- The "Normal Retirement Date" is the first of the month following a player's 62nd birthday.
- Players can opt to receive their pension as early as the 1st of the month following their 45th birthday, but the pension will be reduced accordingly.
4. Considerations:
- The article highlights potential challenges, such as the need for alternative income before pension eligibility at 45, especially if a player retires at 30.
- It raises questions about whether the pension amount, though substantial, would be sufficient for players accustomed to multi-million-dollar incomes.
5. Financial Advisory Services:
- The author, Adam Henry, positions himself as a financial advisor in Winnipeg, specializing in working with professional hockey players.
- He emphasizes the importance of helping players organize their financial affairs, allowing them to concentrate on their careers.
6. Additional Resources:
- The article provides links to related content by Adam Henry on financial management and retirement analysis.
- It includes a disclaimer stating that the views expressed are those of Adam Henry, Investment Advisor, and not necessarily those of Harbourfront Wealth Management Inc.
In conclusion, the article provides a concise yet comprehensive overview of the NHL pension system, addressing eligibility, service-based benefits, retirement options, and potential challenges. Adam Henry's expertise in financial management for professional athletes shines through, making him a valuable resource for players navigating the intricacies of their financial planning.
