NHL Pension Plan: National Hockey League Retirement Planning for Players & Families

Welcome to The Hockey Wealth Group’s introduction to the NHL Pension Plan. In this article, we’ll delve into the critical aspects of retirement planning for National Hockey League players and their families. Please note that this article is only focusing on the post-2012-lockout NHL Players Plan. To learn more information regarding previous NHL retirement plans, visit our website at hockeywealth.com.

NHL Pension Plan: Understanding the Benefits for Players and Their Families

Navigating the complexities of the NHL pension plan can be a daunting task for players and their families. It’s critical to comprehend the provisions of this type of defined benefit plan, ensuring that the transition into retirement is both smooth and secure for those who’ve dedicated their careers to the sport. The National Hockey League Players’ Retirement Benefits Plan offers a pension that is structured to provide a reliable source of income for later in life.

One of the major positives that came out of the 2012-2013 lockout for players was that the NHL retirement system changed from a defined contribution plan to a defined benefit plan. Unlike defined contribution plans where the benefits depend on investment performance, defined benefit pension plans promise a predetermined payout, bringing a welcomed level of certainty for future planning. This is particularly advantageous in a career that sees many players retiring in their thirties – much earlier than the typical retirement age. The NHL’s defined benefit structure ensures that a player’s earnings, years of service, and age factor into the benefit calculation, yielding a formula that provides clear, tangible retirement goals.

How NHL Pension Plan Benefits Are Calculated

NHL pension benefits in the post-2012-lockout plan are based upon your “Credited Service”. Your Credited Service is a formula that is calculated based on the number of games you were on an NHL roster. It doesn’t matter whether you were playing 30-minutes per game, 2-shifts per game, if you were injured, or even if you were eating popcorn in the press box as a healthy scratch. All that matters is that you were on the roster.

These credited games are accumulated based on 20-game segments. Therefore, if you were on the roster for all 82 regular season games, you would be credited with four segments, and two additional games would carryover into the following season’s calculation. If you are fortunate to accumulate 40 of these 20-game segments (800 games on an NHL roster), you are entitled to the maximum benefit allowed by the IRS, which is $275,000/year in 2024. Your benefit also includes a Cost-of-Living Adjustment (COLA). Therefore, annual benefits increase most years.

Your annual statement from the pension states the current value of your pension, as well as the date you will reach “full retirement age” to claim full benefits.

When Can You Claim NHL Pension Benefits?

You are eligible to start your “Normal Retirement Benefit” on the first day of the month coincident with or next following your 62nd birthday. If you no longer play in the NHL, you can typically begin your pension any month after your 45th birthday, but be aware the monthly amount will be heavily discounted to adjust for commencing benefits early. Given the gravity of this decision, we strongly recommend hockey players and their families work with a team of financial and tax professionals before making such a decision.

How are NHL Pension Benefits Paid?

There are two “normal” ways of collecting your pension benefits. If you are unmarried when your benefit payments are scheduled to begin, you will receive a monthly payment for the duration of your life. Payments will stop upon your death.

If you are married when your pension payments begin, you will receive a monthly payment for your lifetime and these payments will continue in full to your spouse if they outlive your lifetime. This reassurance is crucial, as the pension plan’s benefits contribute to the long-term stability for a player’s loved ones. In this case, benefit payments will end after the second spouse has passed away.

Please note that the plan also offers “Optional Forms of Payment”. Please seek guidance from your team of professionals or contact the plan itself for more information.

What Happens if I Pass Away Before Benefits Begin?

If you pass away before you begin receiving benefits, the availability of a survivor benefit will depend on if you have a spouse at the time of your death. If you are not survived by a spouse, there will be no benefits payable from the plan. If you are survived by a spouse, the survivor benefit is payable to your spouse. Therefore, it is paramount that beneficiary designations are updated as life circumstances change.

How the Hockey Wealth Group Can Help

The Hockey Wealth Group serves as an invaluable resource for NHL athletes seeking to better understand their pension benefits. Our advisors specialize in providing insights and strategies that harmonize with the complexities of the NHL Players Plan. With a meticulous approach, we guide our clients through financial planning to help bridge the income gap from playing career earnings and the benefits they’ll receive from their pension plan, ensuring they’re positioned to capitalize on these fundamental retirement resources to their fullest extent.

1. Understand the Plan Benefits: Familiarize yourself with the benefits offered by the NHL pension plan, including the types of benefits and when they become payable.
2. Review Service Time: Verify your “Credited Service” accumulated to understand the size of your pension benefits.
3. Beneficiary Options: Understand the rights of your married spouse through the joint and survivor annuity.
4. Designate Beneficiaries: Select beneficiaries for your pension in case of your death, ensuring they are properly documented and updated as necessary.
5. Keep Personal Information Updated: Ensure the NHL pension plan has your current contact information, marital status, and other personal details.
6. Plan for Retirement Age: Decide when you would like to begin receiving pension benefits, keeping in mind the early retirement options and their effects on your pension amount.
7. Submit Required Documentation: Provide all necessary documents and identification to support your application.
8. Complete Application Process: Fill out the pension application forms thoroughly and submit them within the deadlines provided.
9. Understand Tax Implications: Learn about the tax treatments of pension benefits and plan accordingly for any tax obligations you may have.
10. Stay Informed on Pension Changes: Regularly check for any updates or changes to the NHL pension regulations that could affect your benefits.

Maximizing NHL Retirement Benefits: A Guide for Athletes in the National Hockey League

Being in the NHL signifies more than just a spot in professional hockey; it’s an opportunity to secure financial stability long after the skates are hung up. Our focus is providing a comprehensive analysis that aligns with hockey player’s individual needs and aspirations.

Another aspect where analysis is crucial is understanding how the NHL pension benefits interact with other retirement savings and investment strategies. For NHL families, the pension plan is a piece of the larger financial picture. Integrating it with other income streams can significantly enhance an athlete’s retirement prospects. At The Hockey Wealth Group, it’s our mission to align your NHL pension with other financial pillars, constructing a robust, secure framework that sustains you and your loved ones for years to come.

Finally, to optimize your NHL pension, athletes should be proactive in their approach. Regular consultations with a knowledgeable advisor like those at The Hockey Wealth Group can illuminate paths otherwise unseen, confronting potential challenges with practiced ease. Whether it’s keeping abreast of changes within the NHL pension system or adapting plans to personal fiscal shifts, our detailed analysis safeguards against the unexpected, ensuring your benefits serve you, defining the very essence of a successful retirement strategy.

At The Hockey Wealth Group, we understand the unique challenges that come with managing wealth for NHL professionals and their families. Tailoring our expertise to your specific needs, our team is committed to assisting players in maximizing their NHL pension plan benefits and creating a secure financial future. Remember, successful retirement planning is a journey that extends beyond your time on the ice. Let us help guide you toward a strategy that ensures lasting prosperity well into retirement. Contact The Hockey Wealth Group today, and let’s secure your legacy together.

Q: What is the National Hockey League (NHL) Pension Plan?
A: The NHL Pension Plan is a defined benefit plan designed to provide a reliable source of post-retirement income for players. It calculates benefits based on a player’s “Credited Service”, ensuring a predictable and stable financial future for retirees of the league.
Q: How does a defined benefit plan like the NHL’s differ from a defined contribution plan?
A: Unlike defined contribution plans, which depend on investment performance and can vary in payout, a defined benefit plan like the NHL’s promises a fixed, predetermined payout. This brings certainty and clarity to retirement planning, which is especially beneficial for players who typically retire early.
Q: What services does The Hockey Wealth Group provide to NHL professionals and their families?
A: The Hockey Wealth Group offers specialized wealth advisory services to hockey players and their families. We provide investment, tax, and financial planning to help families navigate the various life phases of professional hockey.
Q: Why is it important for NHL players to understand their pension plan benefits?
A: Given the early retirement age of NHL players, understanding pension plan benefits is essential to ensure long-term financial security. Knowledge of these benefits allows players to make informed decisions regarding their financial future and empowers them to plan effectively for life beyond their playing careers.

Disclaimer: The information provided is intended to be for educational purposes only and does not constitute financial, tax or legal advice. Contact your attorney or other advisor regarding your specific legal, investment or tax situation.