401(k)s flagged in NFL’s referee debacle
Taking blame for blown calls on pivotal plays represents new low
By Ian Salisbury
The advent of the 401(k) plan gets blamed for much of the financial woe facing baby boomers as they approach retirement. But until this week, the savings plans had never been held responsible for the outcome of a football game.
As a pair of replacement referees infamously differ in their rulings on the Monday night game’s final play, receiver Golden Tate of the Seattle Seahawks tussles for ball control with Green Bay Packers defensive back M.D. Jennings.
Behind the National Football League’s lockout of its referees — and the ensuing bad calls — is an effort to replace the refs’ pension plan with a 401(k). The NFL ended its lockout of the refs early Thursday after the parties reached a tentative agreement in their contract dispute. Details of the deal were not immediately available.
But while the referees may have been getting short shrift from the billion-dollar industry in which they’re employed, they remain fortunate in many respects when compared with much of the American workforce.
A generation after employers started shifting employees to defined-contribution plans like 401(k)s, pensions have become scarce — and for part-time employees like the refs, they’re almost nonexistent.
Just how rare are they? According to the latest data from the Bureau of Labor Statistics, only about one in three part-timers gets offered a 401(k)-type plan of the type the referees wish to avoid. And fewer than one in 10 gets a prized pension plan like the one they hope to keep. “It’s almost unheard of,” says Rick Meigs, president of 401khelpcenter.com.
Basically, employers don’t want to be on the hook for regular pension payments to employees, largely because it’s difficult to predict how much that will cost. Employees who otherwise must decide how much to save on their own don’t want to take this risk, either.
Losses sustained in the financial crisis revealed that the 401(k) system isn’t serving workers nearly as well as experts once hoped it would. At the same time, many employers who’ve had to kick in more money to keep pensions solvent doubled down on efforts to rid themselves of old plans.
Even for the booming business that is the NFL, that’s been more or less the story, says Bob Boland, a professor of sports management at New York University’s Tisch Center. While players continue to enjoy both types of benefits, the league moved coaches and other employees toward a defined-contribution system several years ago. “Everybody in the world is facing this problem,” Boland says.
Will the referees share the same fate as most other American workers? It’s too soon to say. All employees probably think their contribution is key to the health of their business. But they don’t all have a highlight reel that shows it.