How To Understand My NHL Pension Benefits
By: Tyson Strachan, MBA
Understanding the NHL Players Pension and your options as a retired hockey player is a difficult task. The first question to ask yourself is: “Which pension am I invested in”? As a former NHL player who personally has participated in both NHL plans, below are some of the basics that I hope you find helpful.
If your pension benefits are in the “New” plan (2012-present):
One of the major adjustments that came out of the 2012 lockout was that our pension was changed from a defined contribution plan to a defined benefit plan. If you played NHL games after the 2012 lockout, your benefits from that time forward are fairly easy to understand. Your future benefits are determined by your Credited Service, which is calculated based on:
- Number of games you are/were on an NHL roster
- Doesn’t matter if you were playing, injured, or just a healthy scratch
- Credited games are accumulated in 20-game segments
- If you accumulate 40 of these 20-game segments (800 games on an NHL roster), you are entitled to the maximum benefit allowed by the IRS
- In 2023 – this amount is $265,000
- Your benefit also includes a Cost-of-Living Adjustment (COLA); therefore, annual benefits increase most years
- Your yearly statement from the pension, clearly states what the current value of your pension is worth, and the date you will reach “full retirement age” to claim full benefits.
If your pension benefits are in the “Old” plan (1986-2012):
For those who played prior to the 2012 lockout season, our NHL pension benefits are unfortunately more difficult to understand, and each player’s benefit is dependent on several factors such as:
- Where you played (U.S. or Canada)
- Where you were a tax resident at that time
- Where are you currently a tax resident
- When you played for a team, or multiple teams in your career
Prior to 1986, players were allowed to negotiate for pension benefits in their contracts, and those benefits were paid in private annuity contracts. Then in 1986, the original NHL Pension was collectively bargained for, and a defined contribution plan was created. This original plan was entirely funded in Canadian dollars and was/is considered a Canadian Pension Plan. At that time, any player that owned pre-1986 annuity contracts were permitted to roll those funds into the new plan.
Up until the 2001-2002 season, all players in the league were participants in the aforementioned Canadian Plan. However, in 2001, the U.S./Canada Tax Treaty was revised and the result was a separately created U.S. Players’ Plan. Therefore, whether your contributions went to the Canadian or U.S. Plan was based on whether you were playing in Canada or in the States during any particular season. While the creation of the U.S. Plan provided more options to access funds for players retiring/living in the States, the existence of the two separate plans created additional complexities, especially for players who played both in the U.S. and Canada throughout their NHL career. Further complications arise for players that happened to be traded cross border mid-season.
If you are an NHL alumnus and are having trouble understanding your pension benefit options, you are not alone, and our team of retired hockey players would love to be a resource to you.
Through our experience in educating multiple retired NHL players navigate the process of evaluating and accessing their NHL pension benefits, we have recognized there is a serious lack of credible information available.
To that end, we would like to be a resource to you and your family. Our team has personal experience with benefits in both the “Old” and “New” NHL plans. Please do not hesitate to contact our firm for a free consultation of your pension and retirement benefits.
Tyson Strachan, MBA
The Hockey Wealth Group